The Trump administration announced on Tuesday that it intended to end a Biden-era program that for the past two years has helped tamp down the cost of monthly premiums for drug coverage for people on Medicare.
The decision means that millions of Americans 65 and older could face higher Medicare drug premiums next year, when the cost of living is already a major concern. That could be politically damaging for Republicans in the midterm elections. In the weeks leading up to November, Medicare beneficiaries could experience sticker shock while shopping for next year’s drug plan.
For 2025 and 2026, the federal government gave health insurers billions of dollars in subsidies to help them keep down drug premiums for people on Medicare. Without the subsidies, millions of people could have had to pay hundreds of dollars more a year for their drug plans.
Dr. Mehmet Oz, the administrator of the Centers for Medicare & Medicaid Services, said in a post on social media on Tuesday that the subsidies had been ended because the insurers no longer needed them. He said every Medicare beneficiary would still have options for low-cost plans.
“Premiums will go up by less than $10 for most Medicare recipients, with many even seeing LOWER premiums,” Dr. Oz wrote.
He said that the Biden administration’s approach was “unacceptable” and that it “gave BILLIONS of taxpayer money DIRECTLY to Big Insurance Companies.”
But it is not clear yet how many people may have to pay more, and how much it will cost them. Prices vary widely across plans, and people will have the opportunity to shop for a new plan this fall. C.M.S. said it expected to make public the monthly premiums for individual plans in September.
The Wall Street Journal earlier reported the decision to end the subsidies.
About 25 million Americans have stand-alone plans for so-called Part D drug coverage under traditional Medicare. The premiums they pay are $36 a month on average, according to KFF, a nonprofit health research group. An additional 31 million beneficiaries get their drug coverage through Medicare Advantage, a private-sector alternative for people 65 and older.
Biden administration officials set up the subsidy program before the presidential election in 2024 to offset changes that would have sharply raised Medicare drug premiums for 2025.
Biden officials were reacting to the effects of the Inflation Reduction Act, passed in 2022 by Democrats without any Republican votes, which introduced a $2,000 annual cap on out-of-pocket spending on prescription drugs along with other changes to Medicare.
At the time, Republicans sharply criticized the offset plan, calling it a nakedly political ploy meant to sway voters. They said it would offer older people only temporary relief.
The administration’s decision on Tuesday will not change that cap on out-of-pocket costs, which was $2,100 this year and may rise to about $2,400 next year.
For months, President Trump has been promoting his efforts to lower prices for weight-loss drugs and other medicines, saying that alone should be enough to win the midterms for Republicans.
Democrats pounced on the Trump administration’s announcement on Tuesday. Kendall Witmer, a spokeswoman for the Democratic National Committee, said in a statement that Mr. Trump and Republicans “are doing everything they can to make health care unaffordable for Americans, especially for seniors.”
In another statement on Tuesday, Leslie Dach, the chair of Protect Our Care, a left-leaning health care advocacy organization, accused the Trump administration of “eliminating a key program that helps seniors afford their medications.”
AHIP, a major trade group for the insurers, said it was reviewing the announcement. “At a time of sharply rising prescription drug costs, health plans are focused on keeping Part D coverage and benefits as affordable as possible,” said Chris Bond, a spokesman, in a statement.
