Anna Wilde Matthews reports for the Wall Street Journal that older adults should expect to see their prescription drug costs rise significantly in 2026. If you’re in traditional Medicare, your Medicare Part D premium will likely go up a lot. While Matthews does not address the consequences for people in Medicare Advantage (MA), most MA enrollees will pay more out of pocket for their drugs or see benefit cuts.
In short, the Trump administration opted not to continue the Biden administration program that gave Part D insurers $6.2 billion extra this year to reduce drug costs for people with Medicare. The Biden administration also capped the insurers’ ability to increase monthly premiums to no more than $35.
The Trump administration is reducing the Part D insurer subsidy down to about $3.7 billion. The subsidy should save enrollees around $10 a month. But, the Trump administration is allowing insurers to raise monthly premiums next year as much as $50. The Part D insurers will raise costs to their enrollees to offset their additional costs.
The Centers for Medicare and Medicaid Services say that they want to keep costs down for people with Medicare Part D and are negotiating with the Part D insurers. It’s not at all clear that they will succeed at negotiating them down without giving insurers more money. They expect that Part D expenses will rise a lot.
The Trump administration says that high insurer subsidies are a huge expense. They truly are a waste of money. But, without the subsidies, so long as the government does not negotiate drug prices, people with Medicare will pay more.
People enrolled in traditional Medicare will likely feel the cost increase most directly, in the form of higher monthly premiums. People enrolled in Medicare Advantage will likely see overall premiums rise or benefits cut or higher out-of-pocket costs.
The Part D insurers say that people are spending more on drugs. In addition, the $2,000 out-of-pocket cap on drugs drives up costs for everyone at the same time that it protects people with high drug costs from exorbitant out-of-pocket spending.
Here’s more from Just Care:
- Millions safely import low-cost drugs from abroad
- Medicare Part D drug coverage stunts are rampant
- Case study: Costco saves one couple hundreds of dollars over Medicare Part D
- GAO finds US drug prices more than four times those in France
- Trump tax bill drives up Medicare drug costs
