CMS will end Medicare Part D premium-stabilization program after 2026
CMS will end a temporary Medicare Part D program after 2026. MedPAC estimated it reduced the average standalone drug-plan premium by $16 in 2026, potentially increasing costs for some enrollees in 2027.
The Centers for Medicare & Medicaid Services will end a temporary program that has helped limit premiums for some standalone Medicare prescription-drug plans after 2026, a decision that could increase costs for some beneficiaries in 2027.
CMS announced the change on July 29, 2026. The Medicare Part D Premium Stabilization Demonstration will remain in effect through 2026, making this the program’s final year. Its expiration will affect how standalone Part D plans set premiums for the 2027 plan year.
What is changing
The demonstration was implemented in 2024 after changes created by the Inflation Reduction Act. It was designed to limit premium increases in standalone Medicare Part D prescription-drug plans, rather than change the underlying Part D benefit.
MedPAC, the independent congressional advisory commission on Medicare, estimated that the program’s subsidy offset the average Part D premium by $16 in 2026. That is an estimate for the average premium, not a uniform reduction received by every enrollee. The effect also varied by plan.
When the demonstration ends, standalone plans will operate without that temporary premium-stabilization mechanism. That could put upward pressure on premiums for some people who buy prescription-drug coverage separately from Medicare Advantage.
The change applies to Medicare Part D plans nationwide. Its effect will depend on the premiums individual plans set for 2027 and on each beneficiary’s coverage choices. Not every Part D enrollee will necessarily see a premium increase, and future changes cannot be attributed to the demonstration’s expiration alone.
What is not ending
CMS’s decision does not end Medicare Part D. The federal prescription-drug coverage program will continue; the temporary policy being discontinued is the mechanism that helped moderate premiums for standalone plans.
That distinction is important for beneficiaries trying to understand what the announcement means. The decision concerns the cost of obtaining Part D coverage, not the elimination of Medicare’s prescription-drug benefit.
The premium-stabilization demonstration is also separate from Medicare’s drug-price negotiation program. The first negotiated prices took effect in 2026 after the Supreme Court rejected appeals from pharmaceutical companies challenging the negotiations.
Drug-price negotiation addresses the prices Medicare pays for certain medicines. The stabilization demonstration addressed premiums charged for standalone Part D plans. Ending one does not cancel the other.
What beneficiaries should watch
The key transition is from 2026, the final year of the temporary program, to 2027, when standalone Part D plans will no longer receive the same stabilization support. The final premium for each plan will determine how much the change affects a particular enrollee’s monthly costs.
People enrolled in standalone Part D coverage will have the most direct reason to review their plan’s 2027 premium when that information becomes available. They may also need to consider how the premium compares with other available coverage options, although the impact will differ among plans and beneficiaries.
CMS has announced the end of the demonstration, but the available public reporting does not identify the final 2027 premium amount for each individual plan. Those plan-level figures, along with CMS calculations for the 2027 plan year, will show how widely costs change.
For now, the immediate policy result is clear: a temporary program created in 2024 will end after its 2026 final year. Medicare Part D will continue, while some people with standalone prescription coverage could face higher premiums when the stabilization program is no longer in place.
