The Medicare Part D prescription drug benefit was designed to offer Medicare beneficiaries the choice of drug coverage from either stand-alone prescription drug plans (PDPs) for people in traditional Medicare or Medicare Advantage prescription drug plans (MA-PDs) that offer both medical and drug benefits, with plans competing on premiums, coverage, and cost sharing. Increasingly, however, PDPs and MA-PDs are competing on uneven terms, in part because the payment system for Medicare Advantage plans enables MA-PDs to lower Part D premiums or reduce Part D cost sharing, making drug coverage from Medicare Advantage plans appear considerably cheaper, or even premium-free, to the beneficiary. The payment advantage for MA-PD sponsors makes it harder for PDP sponsors to compete on premiums, which may be especially challenging when all Part D plan sponsors are facing more cost pressures associated with a redesigned Part D benefit that shifted more costs onto plans and the loss of rebates for selected drugs under the Medicare Drug Price Negotiation program.

The federal government has recently taken steps to mitigate premium increases for Part D coverage, through both a provision in law capping annual growth in the base beneficiary premium to 6% for PDPs and MA-PDs and a temporary premium stabilization demonstration solely for PDPs. While these efforts have helped prevent an increase in the overall average PDP premium, the average premium for drug coverage remains significantly higher for PDPs than for MA-PDs. Recent years have also seen a decline in the average number of PDPs available to beneficiaries, which might make plan comparisons easier but might also make it harder to find an affordable plan that meets an individual’s unique needs. This reduction in the number of PDPs stands in sharp contrast to the MA-PD market where plan offerings have generally been increasing, though they have declined slightly over the past couple of years. 

This brief discusses the growing instability of the Part D stand-alone drug plan market and how the Medicare Advantage payment system makes it harder to maintain competitive and affordable options in the PDP market.

Takeaways

• Reflecting shifts in Part D plan availability in recent years, the average Medicare beneficiary now has nearly three times more options for Part D coverage from MA-PDs than from PDPs (32 vs. 11), a substantial change from five years ago when the average beneficiary had 30 PDP options and 27 MA-PD options.
• In 2026, MA-PD sponsors allocated over $600 in rebates per individual Medicare Advantage plan enrollee, or more than $50 per member per month, for Part D benefit enhancements and premium reductions. Due to rebate-financed Part D premium buydowns, most MA-PD enrollees are in plans charging no premium, including for drug coverage, in 2026.
• PDP sponsors are also receiving additional temporary premium subsidies through the PDP Premium Stabilization Demonstration, established to prevent substantial PDP premium increases as a result of the Part D benefit redesign. The federal government is providing around $190 in annual premium subsidies per PDP enrollee under the stabilization demonstration in 2026, based on a projected $16 per member per month premium reduction.
• Under a provision of the Inflation Reduction Act capping annual growth in the Part D base beneficiary premium to 6%, the federal government is providing a higher direct subsidy payment to both PDP and MA-PD plan sponsors to cover their basic Part D benefit costs, relative to what they would have received absent the 6% base premium cap, which helps absorb cost increases under the IRA’s Part D benefit redesign and mitigates premium increases for both PDP and MA-PD enrollees. The 6% base premium cap is projected to reduce the average premium by a similar amount in both markets in 2026.
• On a per member per month basis, the amount of rebates used by Medicare Advantage plans to buy down MA-PD Part D premiums in 2026 is projected to be over three times greater than the amount of premium subsidies to PDPs under the temporary premium stabilization demonstration—$53 for MA-PDs vs. $16 for PDPs. (These projections are based on 2025 Part D enrollment, not taking into account plan switching or new enrollment for 2026.)
• The total cost to the federal government of rebates to Medicare Advantage plans used for Part D premium buydowns is 3.5 times more than the amount of subsidies to PDP sponsors under the premium stabilization demonstration in 2026 ($13 billion versus $3.6 billion).

The PDP Market Has Been Shrinking in Recent Years

For Medicare beneficiaries who are enrolled in traditional Medicare, which is somewhat less than half of all people with Medicare, getting Medicare Part D prescription drug coverage means enrolling in a stand-alone PDP, a market that has been shrinking in recent years. Over the last five years, the number of PDPs available to the average beneficiary has decreased from 30 in 2021 to 11 in 2026, reflecting a decline in the total number of PDPs available around the country (Figure 1). By comparison, over this same period, the average number of Medicare Advantage drug plans (MA-PDs) increased from 27 to 32. The number of premium-free (“benchmark”) PDPs available to the average Medicare beneficiary who qualifies for the Part D Low-Income Subsidy (LIS) is even lower, decreasing from 8 benchmark PDPs in 2021 to 2 in 2026. This matters because for low-income Medicare beneficiaries who are eligible for the LIS, enrolling in certain PDPs provides the only guaranteed option for premium-free drug coverage and reduced cost sharing.

The Medicare Advantage Payment System Gives MA-PDs a Premium Advantage Compared to PDPs

One factor that has made the PDP market less competitive relative to MA-PDs is a payment system that gives sponsors of MA-PDs a clear advantage in terms of premiums. The Medicare Advantage payment system allows private insurers to retain a portion of the difference between their estimated costs for providing Medicare Part A and Part B services and the maximum Medicare Advantage payment rate. This portion of the federal payment to Medicare Advantage plans is called the “rebate” and it must be used by insurers to reduce the costs of benefits provided under the plan. In the absence of these payments, Medicare Advantage enrollees would face higher costs, including for Part D coverage. To the extent rebates are used to buy down Part D premiums or enhance Part D benefits, they provide a subsidy for Part D coverage to Medicare Advantage enrollees.

In 2026, Medicare Advantage plan sponsors are projected to allocate more than $600 in rebates per enrollee toward enhanced Part D coverage in individual MA-PDs, or just over $50 per member per month. Sponsors of individual MA-PDs use these federal rebates to subsidize Part D coverage by lowering or eliminating their Part D premiums and offering Part D supplemental benefits, including lower or no deductibles for drug coverage and lower cost sharing. Based on the 21 million enrollees in individual MA-PDs, the total amount of rebates from the federal government used for Part D buydowns is $13 billion in 2026.

These rebate subsidies are unavailable to Part D sponsors for PDPs, which means that beneficiaries in traditional Medicare who get Medicare Part D coverage through a PDP typically face higher premiums for their drug coverage than MA-PD enrollees and have far fewer zero-premium options in the PDP market. In 2026, nearly 8 in 10 (79%) MA-PD enrollees in individual plans without low-income subsidies pay no monthly premium for Part D coverage compared to around 3 in 10 (28%) PDP enrollees. For the average Medicare beneficiary in 2026, 21 out of their 32 MA-PD options charge no premium for drug coverage, while 2 out of their 11 PDP options charge no premium.

PDP Sponsors Are Receiving Additional Temporary Premium Subsidies Through the PDP Premium Stabilization Demonstration

The voluntary PDP Premium Stabilization Demonstration, established in 2024 under the federal government’s Section 402 demonstration authority and intended to run for three years, provides additional premium subsidies to sponsors of PDPs to prevent substantial premium increases associated with the Part D benefit redesign. Under the Inflation Reduction Act, the Part D benefit was redesigned to include a new out-of-pocket drug spending cap for Part D enrollees and other changes that significantly shifted costs under the drug benefit from the federal government to Part D plan sponsors, with sponsors paying a larger share of costs above the out-of-pocket spending cap and potentially passing those higher costs along to beneficiaries through higher premiums. The premium stabilization demonstration was targeted to PDP sponsors only, because CMS reported large increases and greater variation in the bids submitted by Part D plan sponsors of PDPs than MA-PDs for drug coverage in 2025, indicating greater variability in the expected impact on basic benefit costs and premiums in the PDP market associated with benefit redesign and other drug pricing cost pressures. In 2026, the federal government is providing around $190 in annual premium subsidies per PDP enrollee under the demonstration, based on MedPAC’s projection of $16 in premium subsidies per member per month in 2026, for a total cost of $3.6 billion.

Both PDP and MA-PD Plan Sponsors Are Receiving Higher Direct Subsidy Payments for Part D Benefit Costs, Which Help Mitigate Premium Increases

The federal government is providing a higher direct subsidy payment to Part D plan sponsors resulting from a provision of the Inflation Reduction Act capping annual growth in the base beneficiary premium to 6%, which helps absorb cost increases under the Part D benefit redesign and also mitigates premium increases. Along with changes to the Part D benefit design and other drug pricing provisions, the IRA capped the increase in the Part D base beneficiary premium to 6%. The base premium is calculated as a share of average plan bids for basic Part D benefits submitted by both PDPs and MA-PDs. As a result of the 6% base premium cap, the federal government is providing a larger direct subsidy payment to both PDP and MA-PD sponsors to cover their basic Part D benefit costs, relative to the level of direct subsidies they would have received without the 6% cap. The cap also has the effect of reducing Part D premiums paid by both PDP and MA-PD enrollees relative to what they would have paid in the absence of the cap (although this 6% cap doesn’t apply to the individual premiums that plans charge). According to MedPAC, the 6% base premium cap is projected to reduce the average premium by a similar amount in both markets in 2026 (as described further below).

The Part D Premium Reduction from Rebates Used by MA-PD Plans is Projected to be Over Three Times Greater Than from the PDP Premium Stabilization Demonstration on a per Member per Month Basis in 2026—$53 vs. $16

Data from MedPAC shows the differential premium impact of the various subsidies provided by the federal government to PDP and MA-PD plan sponsors, with MA-PD premiums substantially lower than PDP premiums as a result. On a per member per month basis, the amount of rebates used by Medicare Advantage plans for Part D premium buydowns in 2026 is projected to be more than three times greater than the amount of subsidies provided to PDPs under the temporary stabilization demonstration—$53 for MA-PDs vs. $16 for PDPs. (MedPAC’s estimates are projections for average monthly premiums per member per month in 2026, based on 2025 enrollment and not accounting for plan switching or new enrollees for 2026.)

After premium subsidies from the 6% base beneficiary premium cap and rebates, the average monthly Part D premium for individual MA-PDs is projected to be $9 per month, compared to an average monthly premium of $44 per month for PDPs, after accounting for the 6% cap and the PDP premium stabilization subsidies (Figure 3). MedPAC’s estimates show that without these extra subsidies, average monthly premiums for MA-PDs and PDPs would be on par with each other in 2026 (with or without the 6% base beneficiary premium cap). (These estimates are MedPAC’s projections for average monthly premiums per member per month in 2026, based on 2025 enrollment and not accounting for new plans, plan changes during open enrollment, or new enrollees for 2026, and therefore differ from other estimates published recently in a separate KFF brief, which are based on March 2026 enrollment and take into account new plans, plan switching, and new enrollees for 2026.)

For individual MA-PDs, the average monthly premium is projected to be $89 lower in 2026 than it would have been without the subsidies—from $98 per month to $9 per month. Rebate subsidies for Part D premium buydowns account for $53 of the premium reduction and subsidies from the 6% cap account for $36 of the reduction.

For PDPs, the average monthly premium is projected to be $53 lower in 2026 than it would have been without the additional subsidies—from $97 per month to $44 per month. Subsidies from the premium stabilization demonstration account for $16 of the premium reduction, while subsidies from the 6% cap account for $37 of the reduction.

The Total Amount of Medicare Advantage Rebates Used for Part D Premium Buydowns in 2026 is 3.5 Times Greater than Subsidies Provided Through the PDP Premium Stabilization Demonstration

The $13 billion in rebates provided by the federal government to individual Medicare Advantage plans used to buy down MA-PD Part D premiums in 2026 is 3.5 times larger than the $3.6 billion in premium subsidies to PDPs under the premium stabilization demonstration (Figure 2). According to GAO,the cost of the PDP premium stabilization demonstration for the first and second years of operation totaled $9.8 billion ($6.2 billion in 2025 and $3.6 billion in 2026). The cost of the demonstration was lower in 2026 than in 2025 because the Trump administration reduced the level of the premium subsidies provided to PDP sponsors in the second year of the demonstration. By comparison, rebates provided to individual Medicare Advantage plans used for Part D premium buydowns totaled $23.7 billion in 2025 and 2026 ($10.6 billion in 2025 and $13.0 billion in 2026). Between 2020 and 2026, rebates to Medicare Advantage plans to offer enhanced Part D benefits, including premium buydowns, totaled $82.2 billion. (These estimates exclude the aggregate cost of extra direct subsidies provided under the 6% base beneficiary premium cap, but this subsidy is applied equally across all plans.)

Recent Trends in the PDP Market Could Make It Harder for Traditional Medicare Beneficiaries to Find Affordable Drug Coverage that Meets Their Needs

A continuation of recent trends in the Part D market—fewer PDPs coupled with higher average premiums for PDPs than MA-PDs—could diminish the ability of Medicare beneficiaries in traditional Medicare to find PDPs at a comparatively affordable price, especially for those with modest incomes, which could make enrollment in Medicare Advantage more likely. Although there are some low-premium PDP options in 2026, roughly half of PDP enrollees are in plans charging $10 or more per month and 20% are paying $100 per month or more in 2026. The choice to enroll in a PDP versus an MA-PD plan comes with tradeoffs that extend beyond prescription drug coverage. While Medicare Advantage plans typically charge zero premium beyond the standard Part B premium and offer extra benefits beyond what is covered under traditional Medicare, they also have more limited provider networks and greater use of prior authorization than in traditional Medicare. Greater financial pressure on Part D plan sponsors that results in additional PDP withdrawals could also further reduce premium-free benchmark PDP options for low-income Medicare beneficiaries. Overall, instability in the PDP market has larger implications for the viability of traditional Medicare as an option for beneficiaries nationwide, but especially for beneficiaries who live in rural areas, who are more likely to be enrolled in traditional Medicare and rely more on drug coverage from PDPs than Medicare Advantage plans.

As of June 8, 2026, six carriers have announced that they will exit the ACA Marketplaces in plan year 2027, either in some or all states that they are currently offering plans: Cigna Health, CareSource, PacificSource, Scott and White, Providence Health, and Taro Health. These insurer exits, expected to impact roughly a third of states, follow the expiration of the enhanced premium tax credits at the end of 2025, which drove sign-ups to fall by over a million from the 2025 to 2026 Open Enrollment Periods—with further membership declines in the ACA Marketplaces expected as the year progresses. ACA Marketplace enrollment declines affect the size of the potential market for insurers, and, potentially, the risk pool—to the extent that healthier than average enrollees are more likely to drop coverage.

As people leave the Marketplace, insurers may reassess the profitability of their Marketplace participation and decide to pull out in the future. Cigna has decided to leave the individual market in 2027 to focus on other segments given the lack of potential to grow their ACA Marketplace business. Cigna, which reported first-quarter on-exchange enrollment of over 350,000 individuals, will exit the 11 states in which it currently participates both on- and off-exchange. In some cases, multiple insurers are announcing exits in the same state, such as in Indiana, Oregon, and Texas. With fewer insurers participating in the ACA Marketplaces, remaining insurers will have less competition and consumers will be left with fewer choices. For example, after the departure of CareSource and Cigna from Indiana, only three companies will remain in that state’s Marketplace if no other companies enter.

In 2025, an average of 9.6 insurers per state participated in the ACA Marketplaces, but this number has since declined to 9.0 insurers in 2026, driven primarily by the exit of Aetna CVS from the Marketplaces. It is possible that more insurers will announce exits ahead of the 2027 plan year and average insurer participation in the ACA Marketplaces will continue to decline. Despite the number of insurers that have decided to exit the ACA Marketplaces for plan year 2027, at least one insurer (Colorado Access) has indicated that it is entering the market.

While insurer participation in the ACA Marketplaces is not yet fully in focus, there are no signs at this point that there will be “bare” counties with no insurers at all, which was a major concern during an earlier period of instability.

For the first time since the enhanced premium tax credits were introduced in 2021, insurer participation in the ACA Marketplaces has gone down. This drop follows the expiration of the enhanced premium tax credits at the end of 2025 and is primarily driven by the exit of Aetna CVS from 17 states as well as exits from other insurers. While the average number of insurers per state offering plans in the Marketplaces in 2026 is lower than in the years after the enhanced premium tax credits were established, more insurers are now offering plans than were before the enhanced tax credits.  

Key Findings:

• The average number of issuers offering plans in the ACA Marketplaces has declined from a record high of 9.6 issuers per state in 2025 to 9.0 issuers per state in 2026.
• In total, 18 states experienced a net decrease in the number of issuers offering ACA Marketplace plans.
• Three in 10 counties have fewer participating ACA insurers than last year. In 165 counties, only one issuer is offering plans on the ACA Marketplace, up from 93 counties in 2025.

Insurer Participation

National Level

Nationally, average insurer participation in the ACA Marketplaces has decreased from the record high of 9.6 insurers per state in 2025 to 9.0 insurers per state in 2026. This decrease follows the nationwide departure of CVS from the Exchanges and marks the first time since 2018 that the average number of insurers in the ACA Marketplaces has gone down. Insurer participation on the ACA Marketplaces fell in 2017 with the exit of UnitedHealthcare from most states. In 2018, following several attempts to repeal the ACA in Congress as well as changes to enforcement of the individual mandate and payments for cost-sharing reductions, many more insurers exited or scaled back their participation. As the Marketplace stabilized in the following years, participation in the ACA Marketplaces steadily grew with some insurers returning to the Marketplace and several others expanding their footprints.

One factor that contributes to the number of insurers participating in the Marketplaces is the number of people with coverage. After the introduction of the enhanced premium tax credits in 2021, enrollment in the Marketplaces reached new records. In line with this trend, the number of insurers offering plans in the ACA Marketplaces increased significantly in 2022. Data shows that after the expiration of the enhanced premium tax credits, 2026 Open Enrollment Period sign-ups declined by over one million people relative to last year; and the number of people who pay to maintain and “effectuate” their coverage will likely decline throughout the year. KFF estimates that average effectuated enrollment in the Marketplaces could decline by about five million people from 2025 to 2026.

ACA Marketplace enrollment declines affect the size of the potential market for insurers and, potentially, the risk pool—to the extent that healthier than average enrollees are more likely to drop coverage. As people leave the Marketplace, insurers may reassess the profitability of their Marketplace participation and more may decide to pull out in the future, either fully or in select states. Several insurers have already announced departures for the 2027 plan year. KFF’s Insurer Participation Tracker maps announced insurer exits and entries for 2027.

State Level

The five states with the most insurers offering plans in their ACA Marketplaces in 2026 are Texas (15), New York (12), California (11), Florida (11), and Wisconsin (11). Going into 2026, most states had the same number of issuers participating in their Marketplaces as in 2025.

In 18 states, the number of insurers offering ACA Marketplace plans in 2026 is lower than in 2025. Illinois and Michigan saw the greatest net decrease in the number of carriers, with three fewer insurers participating in their Marketplaces than in 2025.

Four states (Alabama, Iowa, Louisiana, and Washington) experienced a net increase of one insurer. For example, Oscar Health newly joined the Exchange in Alabama and Elevance Health (doing business as Wellpoint) began offering plans in Washington.

The most prominent insurer in the Marketplace is UnitedHealth, which offers Marketplace plans in 30 states. Some of the other major players currently in the Marketplace include Centene Corporation (29 states), Oscar Health (20 states), Elevance Health (18 states), Molina Healthcare (14 states), Cigna Health (11 states), and Kaiser (10 states). CVS, which ran Aetna plans in the ACA Marketplaces, was a significant insurer participating in the ACA Marketplaces in 2025. Before leaving the Marketplace for plan year 2026, CVS Aetna offered plans in 17 states.

Some of the aforementioned insurers are among those with the largest number of enrollees in the individual market (the vast majority of which is made up of people in the Marketplace in 2025). For example, in 2024, 18% of people in the individual market were enrolled in a plan offered by the Centene Corporation and 8% of individual market enrollees were in a plan offered by CVS.

County Level

Even if an insurer remains in a state, it may significantly change its footprint from year to year. Insurers adjust their footprints by expanding into some counties or withdrawing from others. For example, UnitedHealth scaled back its footprint in Kansas from 87% of counties in 2025 to 33% in 2026, and in South Carolina from 72% of counties in 2025 to 37% in 2026. However, it also expanded its service area in Oklahoma, offering plans in 74% of counties in 2026, up from 18% in 2025. Another major player in the ACA Marketplaces, Centene Corporation, went from offering plans in all counties in North Carolina in 2025 to 63% of counties in 2026. This decrease is driven by the exit of WellCare (a subsidiary of Centene) from the North Carolina Marketplace starting in 2026. In Iowa, Centene’s footprint increased from 33% to 59% of its counties going from 2025 to 2026.

In 2026, three in 10 counties saw decreases in the number of insurers participating in the Marketplaces. The counties that experienced the greatest number of insurers leaving were in Wisconsin, which saw two insurers (Chorus Community Health Plan and Molina Healthcare) exiting the ACA Marketplace entirely as well as shrinking presence of others (namely, CareSource and University Health Care and Gundersen Lutheran). Some counties in North Carolina and Michigan also experienced significant declines in the number of participating insurers, with as many as three carriers leaving counties starting in 2026.

In total, 165 counties have only one insurer offering plans in the ACA Marketplaces in 2026. For 90 of these counties, this is a result of insurers not offering plans anymore starting in 2026. For the remaining 75 one insurer counties, the number of carriers offering plans remains the same as in 2025.

Issuers do not always offer bronze plans. By law, every ACA Marketplace insurer must offer at least one silver and gold plan wherever they sell coverage. In 2026, there were 490 counties (predominantly located in New Mexico, Indiana, Mississippi, New Jersey, Texas, and South Carolina) where some participating insurers decided not to offer bronze plans. In these places, the selection of plans for consumers who wish to decrease their premium payments by buying a lower coverage metal level may be reduced. However, for 433 of these 490 counties, at least two insurers offer bronze plans.

Methods

The Qualified Health Plan Individual Medical Landscape File and Robert Wood Johnson Foundation (RWJF) HIX Compare file were used to determine the number of insurers participating in states using the federal platform and state-based Exchanges, respectively. HIOS IDs from these files were mapped to the 2024 MR Submission Template Header to determine the NAIC Code for each insurer, which was then joined with 2025 data from Mark Farrah Associates’ Enrollment by Segment Exhibit (downloaded December 9, 2025) to identify the parent company associated with each insurer. In cases when a parent company is not successfully identified through the MR Submission Template Header and the Enrollment by Segment Exhibit, additional work was done to identify and manually assign either the NAIC code or parent company name for each plan.  Insurer in this analysis refers to parent company, irrespective of the name under which it does business across states.

The following manual additions/changes were also made:

• Data for New York was adjusted to include Anthem Blue Cross and Blue Shield HP, Anthem Blue Cross HP, and Independent Health.
• Bronze plans identified to be in San Juan County, Washington after combining the RWJF datasets together were removed.

HIX Compare insurer plan availability is reported by rating area—which may contain multiple counties—in conjunction with insurer participation reported by county. County-level insurer counts of plans in state-based Marketplaces may consequently be overstated when the insurer does not offer a given plan in a county but offers other plans in the same county, notably for plans of a given metal level. Although plan availability can vary within a county (such as by ZIP code), a plan is considered as available if offered anywhere in the county.

Appendix

The House Appropriations Committee released its Fiscal Year 2027 Labor, Health and Human Services, Education, and Related Agencies (Labor HHS) appropriations bill on June 4, 2026 and accompanying explanatory report on June 8, 2026.

While most U.S. global health funding is provided to the State Department through a separate appropriations bill (see the KFF budget summary on this funding here), the Labor HHS appropriations bill includes funding for global health programs at the Centers for Disease Control and Prevention (CDC) as well as funding for global health research activities at the National Institutes of Health (NIH). Total global health funding at CDC and NIH through the Labor HHS bill is not yet known, as funding for some programs (i.e. global HIV/AIDS and malaria research) at NIH is determined at the agency level rather than specified by Congress in annual appropriations bills. Funding for global health in the Labor HHS bill remained flat compared to the FY 2026 level as follows:

• CDC: Funding for global health programs at CDC totals $693 million, flat compared to the FY 2026 enacted level. This total includes funding provided for parasitic diseases and malaria, which the House bill moved to CDC’s Center for Emerging and Zoonotic Infectious Diseases but is included in the total here for comparison purposes. Within CDC, funding for polio and global public health protection were maintained at the FY 2026 level, and all other program areas (global HIV/AIDS, global tuberculosis, measles and other vaccine preventable diseases) were consolidated into the newly established “Global Emerging Infectious Diseases” line. The House report also directs “continued coordination with the State Department’s Bureau of Global Health Security and Diplomacy” on the implementation of the President’s Emergency Plan for AIDS Relief (PEPFAR) and other global health programs, “provides funding to be programmed by the CDC Director to sustain in-country health security capacities with international partners,” as well as “directs CDC to prioritize existing CDC international staffing, and to provide a briefing to the Committee not later than 90 days after enactment of this Act on the status of its engagement with the Department of State, the agency’s current global health workforce capacity, overseas staffing footprint, and plans to bolster core global health security and infectious disease response capabilities.”
• NIH: Funding for global health research activities at the Fogarty International Center (FIC) at NIH totals $95 million, the same level as the FY 2026 enacted amount.

In addition, Section 235 under the Labor HHS section of the bill specifically states that funding “shall be for the budget activities, and in the amounts specified in the table under each such heading in the report accompanying this Act” instructing the administration to provide the amounts for the areas specified.

See the table below for additional details on global health funding. See other budget summaries and the KFF budget tracker for details on historical annual appropriations for global health programs.

Worsening fiscal constraints and changing policy priorities have resulted in significant funding cuts to global health and development programs. While these reductions predated the cuts and disruptions made by the U.S. government last year, they were exacerbated by U.S. actions. The Organisation for Economic Co-operation and Development (OECD) recently reported that international aid fell significantly in 2025, driven primarily by the U.S., and that further declines are likely on the horizon. The health sector has not been immune to these pressures. The U.S. government and the Global Fund to Fight AIDS, Tuberculosis and Malaria (Global Fund), the top two donors¹ to global health in low- and middle-income countries, each took actions to reduce funding to countries starting last year and plan to further reduce funding going forward. Under the Trump administration, the U.S., as part of its new America First Global Health Strategy (AFGHS) “MOU” agreements with countries, plans to reduce funding by billions over the next few years. The Global Fund, due to reduced contributions from the U.S. and other donors, is also reducing funding in the same set of countries. Together, the U.S. and Global Fund reductions serve as a “one-two punch” to countries, who will be faced with significantly fewer resources in the coming years.

This analysis assesses the magnitude of these combined funding cuts in 29 U.S. MOU countries between 2026 and 2029, relative to prior funding levels (see methodology for more details). As it shows, the combined decline is estimated to total $4.3 billion– a 24% drop relative to prior funding levels — most of which (77%) is driven by the U.S.  The cumulative cut, taking into account unexpected reductions in 2026, was even larger, reaching $5.8 billion. Moreover, further declines are likely to occur after this period.² Such funding declines are unprecedented in the modern-day era of global health, which saw the creation of the President’s Emergency Plan for AIDS Relief (PEPFAR), the U.S. government’s flagship global health program, and of the Global Fund in the early 2000s, both of which helped to usher in significant new resources for global health.

Findings

The U.S. government is planning steep funding cuts to countries for health programs. In the 29 MOU countries analyzed, these cuts are estimated to total $3.3 billion by 2029, a 29% drop relative to prior funding levels.

• Overall, funding in these 29 countries is estimated to decline from $11.3 billion over the prior three-year period (2024-2026) to $8 billion for the next three-year period (2027-2029), a 29% decline. This decline reflects two factors: first, after several years of stable funding for countries, the administration announced significant reductions starting in 2026, relative to prior levels, estimated to be $840 million, or 7%; second, further reductions of $2.5 billion or 23% are planned for 2027-2029 (see Figure 1).
• Almost all 29 countries will face funding reductions.³ The countries with the biggest reductions in dollar terms are Uganda ($370 million), Mozambique ($356 million), Nigeria ($280 million), and Malawi ($252 million). Reductions range from 1% in Honduras to 82% in Senegal, with 12 countries experiencing reductions of 50% or greater (see Appendix Table 1).

In these same 29 countries, Global Fund support is expected to decline by almost $1 billion over the next three years, a 15% drop compared to the prior period.⁴

• Global Fund support will decline from $6.6 billion in the 2024-2026 country allocation period (grant cycle 7, or GC7) to $5.6 billion in the 2027-2029 allocation period (grant cycle 8, or GC8), a decline of $962 million or 15%. This decline is the result of the following two factors: a reduction in the original funding allocated to countries for GC7, due to unexpected shortfalls in donor contributions to the Global Fund (a reduction of $699 million or 11% from the original to revised allocations), and further reductions planned for GC8 due to ongoing funding constraints (a reduction of $263 million or 4% from revised GC7 allocations to GC8 allocations) (see Figure 2).
• All 29 MOU countries will face Global Fund reductions. The countries with the biggest dollar reductions in GC8 (compared to the original allocations for GC7) are Nigeria ($141 million), Mozambique ($89 million), and the Democratic Republic of the Congo ($83 million). Reductions range from 5% in Niger to 53% in Guatemala (see Appendix Table 2).

The combined funding reduction from the U.S. and the Global Fund in these 29 countries is estimated to total $4.3 billion through 2029, a 24% decline (see Figure 3). The U.S. accounts for more than three quarters (77%) of the drop.

• About half (15) of the MOU countries will experience funding reductions of $100 million or more, with the largest reductions in Mozambique ($445 million), Uganda ($436 million), Nigeria ($422 million), and Malawi ($331 million). Reductions range from 7% in Papua New Guinea to 66% in Senegal (see Appendix Table 3). The cumulative cut, taking into account unexpected reductions in 2026, was even larger, reaching $5.8 billion.
• In addition to these funding reductions, these countries also face co-financing requirements from both the U.S. and the Global Fund  – with the U.S. requirement occurring for the first time – which could, in some cases, intensify the fiscal impact on recipient countries while offsetting some of the effect of the reductions on global health programs.

Looking beyond 2029, further declines are expected from the U.S., with an uncertain forecast from the Global Fund, as other donor governments are scaling back.

• The U.S. government plans to scale back funding in these 29 countries by an additional $2 billion in 2030 as it seeks to move programs to country governments (the full cut planned for 2027-2030 is estimated to be $5.3 billion).
• While the funding envelope for the Global Fund’s next grant cycle (GC9) is not yet known,⁵ the fiscal environment suggests additional reductions may lie ahead. In addition, five of the 29 MOU countries will transition out of Global Fund eligibility for at least one disease (HIV, TB, or malaria) by the next grant cycle: Botswana, the Dominican Republic, El Salvador, Guatemala, and Honduras.⁶
• More broadly, other donor governments (that provide direct aid to countries as well as support for the Global Fund) have also been scaling back their health and development assistance.

Funding declines of this magnitude are unprecedented in the modern-day era of global health, which saw the creation of the Global Fund in 2002 and the launch of PEPFAR in 2003, both of which helped to usher in significant new resources for global health.

• As such, this next period will mark a significant departure in the global health response, with countries expected to move increasingly away from dependency on external support for health, while simultaneously ramping up their own expenditures. This will likely pose challenges for at least some of these countries, particularly those facing significant co-financing requirements and experiencing or at risk of debt distress and/or fragility or conflict, and will impact the millions of people whose health has benefited from these efforts.

Appendix

Methodology

To assess the impact of funding changes on countries that receive U.S. and Global Fund funding for global health activities, we analyzed funding in three ways. For the 29 countries with signed MOUs and available data, we compared 1.) U.S. MOU funding to historical U.S. planned and proposed funding amounts, 2.) the Global Fund Grant Cycle 8 (GC8) allocations to Grant Cycle 7 (GC7) allocations (both original and reduced GC7 amounts), and 3.) the combined impact of funding changes to U.S. and Global Fund funding. U.S. planned/proposed funding amounts were obtained from ForeignAssistance.gov for FY24, the FY2025 International Affairs Budget Request for FY25 (and FY26 original amounts), and MOU agreements for FY26 revised amounts. U.S. MOU funding amounts were obtained from U.S. Department of State, U.S. embassy, and Ministries of Health press releases, as well as MOU documents if available. Global Fund allocations were obtained from the Global Fund’s ‘Eligibility, Allocations & Funding’ data: https://archive.theglobalfund.org/eligibility-allocations/.

U.S. Funding Comparison: In countries that have signed bilateral global health agreements with the U.S., we compared U.S. MOU funding to what countries had historically received from the U.S. for global health in prior years. “Original prior period” funding represents FY24-FY26 funding; FY24-FY25 represent requested amounts and FY26 was assumed to remain at the FY25 level. “Revised prior period” funding represents FY24-FY26 funding; FY24-FY25 represent requested amounts and FY26 represent the first year of funding (FY26) provided in the MOUs. Most signed MOUs span a five-year period (FY26-FY30). To match the Global Fund’s three-year grant cycle period, if annual funding amounts were not available, five-year funding was adjusted to estimate a three-year total (for FY27-FY29) and compared to the prior three-years of U.S. proposed funding (FY24-FY26). For countries whose annual MOU amounts are not yet available (all but eight), MOU funding amounts were calculated to be spread evenly throughout the five-year period. Based on the eight MOU countries whose annual funding amounts were available (Cameroon, Ethiopia, Kenya, Liberia, Mozambique, Nigeria, Rwanda, and Uganda, which together account for 70% of U.S. MOU funding over the five-year period), the U.S. provides more funding to countries in earlier years of the MOU agreement, with steeper cuts occurring at the end of the five-year MOU period. While 32 countries to date have signed or indicated an intent to sign MOUs with the U.S., for comparison purposes, this analysis is based on 29 countries, as three (Bolivia, Panama, and the Philippines) have limited data on Global Fund allocations, U.S. historical, and/or planned MOU funding (Bolivia received Global Fund support in GC7 and GC8 but did not receive U.S. funding for global health in FY24-FY25; Panama did not receive Global Fund support in GC7 or GC8 and did not receive U.S. funding for global health in FY24-FY25; and the Philippines received Global Fund support in GC7 and GC8 but did not sign an official MOU but rather a declaration of intent to “establish a framework for health cooperation”).

Global Fund Comparison: In the same set of 29 countries, we compared GC8 allocations to GC7 (both original and reduced) allocations. The GC7 replenishment period was 2023-2025 with the country implementation/allocation period spanning 2024-2026; The GC8 replenishment period is 2026-2028, with the country implementation/allocation period spanning 2027-2029. Some GC7 allocation amounts were reported in source currency and were converted to USD based on the EUR/USD allocation rate for the allocation period, EUR/USD = 0.993542.

Combined Funding (Global Fund + U.S.) Comparison: To assess the combined impact of Global Fund and U.S. funding changes in MOU countries, we compared the sum of the original GC7 allocations and U.S. historical global health funding over the same period (FY24- FY26) with the sum of the GC8 allocations and U.S. MOU funding for the following period (FY27-FY29). If annual U.S. MOU amounts were not available, three-year adjusted totals were used.

1. The U.S. government has historically provided a third of the Global Fund’s funding. Even without this amount, however, the Global Fund still ranks as the number two donor to global health. ↩︎
2. For comparison purposes with the Global Fund’s grant period, this analysis focuses on a three-year funding period. The full scope of most U.S. MOUs encompasses five years. Overall, $20.3 billion ($12.8 billion in U.S. funding and $7.5 billion in country co-financing) has been announced for 32 countries over the next five years (FY26-FY30). Compared to the prior five years (FY21-FY25), U.S. funding would decline by approximately $6 billion or 32%. See the KFF Tracker on America First MOU Bilateral Global Health Agreements for more details on the full scope of the MOUs.  ↩︎
3. While El Salvador and Papua New Guinea would experience increases in funding compared to the prior three-year period ($4 million or 28% for El Salvador and $1 million or 13% for Papua New Guinea), these countries would still see drops over the full five-year period of the MOU (a 33% reduction in El Salvador and 26% reduction in Papua New Guinea compared to the prior five-year period). See the KFF Tracker on America First MOU Bilateral Global Health Agreements for more detail. ↩︎
4. More broadly, Global Fund funding to all 103 countries it supports will decline by $2.3 billion in GC8, compared to the original allocations for GC7. ↩︎
5. The Global Fund raises funding in three-year “replenishment” cycles. The amount raised determines the amount available for country allocations. The replenishment conference for GC9 (2029-2031 replenishment period and 2030-2032 country implementation period) will take place in 2028. ↩︎
6. The Philippines, which is also a U.S. MOU country but was not included in this analysis, will also transition out of Global Fund eligibility for at least one disease component in the next grant cycle. ↩︎