Quick Facts
Temporary government subsidies that helped stabilize premiums for some Medicare Part D beneficiaries in the past two years will expire at the end of the year.
That could mean higher premiums for those with a stand-alone Part D prescription drug plan.
While it’s too early to assess the impact, Dr. Mehmet Oz, who heads the Centers for Medicare & Medicaid Services, said premiums will rise by less than $10 for most Medicare recipients. Plan-specific premiums for individual plans will be announced in September.
Part D and Medicare Advantage
Original Medicare includes Part A (hospital insurance) and Part B (doctor visits, medical insurance). Many Medicare beneficiaries are enrolled in both parts, though some have only Part A or Part B. Beneficiaries who want prescription drug coverage may choose to enroll in a stand-alone Part D plan. About 25 million Americans, including 800,000 Michiganders, have stand-alone Part D plans. The premiums they pay are $36 a month on average, according to KFF.
Others choose a Medicare Advantage plan, many of which include prescription drug coverage (Part D) and may also offer additional benefits such as dental, vision, and hearing coverage. Some 31 million beneficiaries, including 1.09 million Michiganders, receive their Medicare coverage through Medicare Advantage plans. Most Medicare Advantage enrollees get their prescription drug coverage through these plans.
Medicare Advantage plan holders will not be impacted by the end of the subsidy.
In the past few years, enrollment in both stand-alone Part D and MA plans has risen, according to data from KFF.
Prescription drug costs and Open Enrollment
Whichever plan you have – be it a stand-alone Part D plan or a Medicare Advantage plan – it pays to have at least an annual benefits checkup to make sure the medications you take will continue to be covered next year.
During Open Enrollment, from October 15-Dec. 7, people with Part D plans may switch or drop their plan.
AgeWays Medicare assistance counselors who are part of the nationwide SHIP (State Health Insurance Plan will be in the six-county region the agency serves (Livingston, Macomb, Monroe, Oakland, and St. Clair) throughout the period. They are there to help beneficiaries review their plan to make sure their drugs are still covered next year and to look for available cost savings.
SHIP counselors have saved Medicare beneficiaries millions of dollars by helping them to enroll in a plan that works for their health care needs and wallet.
There is no cost for an appointment, and counselors are not affiliated with insurance companies. They offer expert help without bias.
The best Medicare plan isn’t necessarily the one you’ve had for years, it’s the one that fits your needs today,” says Crystal Turbett, AgeWays’ Senior Manager of Aging and Disability Resources.
“During every Open Enrollment, we meet with people who are surprised to learn their doctor or pharmacy is no longer in-network, a medication is covered differently, or there’s another plan that could save them money. Spending a little time reviewing your options each year can help you avoid surprises and make sure you’re getting the most from your Medicare coverage,” she says.
The Part D subsidies and how they worked
The subsidies are part of President Biden’s Inflation Reduction Act (IRA) and were intended to expire at the end of 2027. The federal government gave billions of dollars to health insurance providers in 2025 and 2026 to ease the financial burden on Part D Medicare recipients, whose premiums rose every year. The goal was to stabilize those increases.
Without those subsidies, premiums would have been hundreds of dollars more each year for those recipients.
The Trump Administration announced this month that the subsidies would expire this year instead, saying insurance companies don’t need the subsidies.
“While exact 2027 premiums won’t be available until September, reviewing your options during Open Enrollment is the best way to determine whether your current plan is still the right fit,” Turbett says.
Part D without subsidies
Without the subsidies, people with a stand-alone Part D plan could face higher premiums. (There is no indication that the Low-Income Subsidy (Extra Help/LIS) or Medicare Savings Programs (MSP) will be impacted by this change.)
In the first year of subsidies, 2025, Part D beneficiaries saw their average premium drop by $26 and by $16 in 2026. The IRA also capped year-over-year premium increases and out-of-pocket drug spending to $2,000 a year for Part D enrollees. That cap has gone up to $2,100 and is expected to increase to $2,400 next year.
Still, the Part D premium is four times higher than the average premium for drug coverage in MA plans ($36 vs. $8), according to KFF.
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 more information about Open Enrollment or Medicare assistance help throughout the year, call 248-262-0545.
