The Trump Administration is Reducing Enhanced Support for the Part D Stand-Alone Drug Plan Market

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CMS has just announced information about the national average premium for Part D prescription drug coverage in 2026 and other program details. Included in this announcement was the news that the Trump administration plans to continue the temporary Part D premium stabilization program for stand-alone prescription drug plans (PDPs) for another year, but with a reduced level of support for PDP sponsors. The national average premium will be $38.99 in 2026, limited by law to a 6% increase over the 2025 amount. The national average premium factors into what enrollees pay but plan-specific premiums will vary. While plan-specific premiums are not yet available, the reduced level of support suggests that Medicare beneficiaries in traditional Medicare who have drug coverage through PDPs could face substantially higher premiums for coverage in 2026.

The Part D premium demonstration was established in 2024 by the Biden administration ahead of a major redesign of the Part D benefit that took effect in 2025. For the first year of the demonstration, the federal government provided participating PDPs with an across-the-board monthly premium subsidy of up to $15 and limited the monthly premium increase for 2025 to $35, along with a narrowing of the risk corridors to mitigate the risk of losses for participating PDPs.

The premium stabilization demonstration will continue for another year under the Trump administration, but with reduced support to PDP sponsors in 2026. The monthly premium subsidy will be reduced from $15 to $10, and the limit on the PDP monthly premium increase will rise to $50 for 2026, up from $35 for 2025. The risk corridor component of the demonstration is being eliminated.

In announcing these changes, CMS states that it is “facilitating the [Part D] program’s return to operating under regular market conditions.” Increasingly, however, these regular conditions appear unfavorable to the ongoing stability of the stand-alone prescription drug plan market, further tilting the playing field for coverage towards Medicare Advantage.