Insurance for Asset Protection

Bad news for Medicare consumers.
MS to end Medicare Part D stabilization program
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By: Jakob Emerson
yesterday
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CMS will discontinue the Part D premium stabilization program at the end of this year, returning the standalone prescription drug plan market to what the agency called “traditional market conditions.”

CMS said July 28 its analysis of 2027 bids indicated insurers had gained sufficient experience under the redesigned Part D benefit to support their assumptions in developing prescription drug plan bids.

The 2027 national average monthly bid amount, which is used to calculate government subsidies for plans, will be $296.05. The national base beneficiary premium will be $41.33. The 2027 de minimis amount is $2. Final average premiums for 2027 Medicare Advantage and Part D plans are expected to be released in September.

The Biden administration originally announced the stabilization program in July 2024 to test whether additional premium subsidies and financial protections would stabilize year-over-year premium changes for participating standalone plans while the Inflation Reduction Act’s Part D redesign took effect. It reduced beneficiary premiums by up to $15 in 2025 and capped each plan’s premium increase at $35 from 2024 to 2025, with added risk corridor protections for insurers.

CMS scaled the program back for 2026, cutting the monthly subsidy to $10, raising the allowable premium increase to $50 and eliminating the enhanced risk corridors. The agency said at the time it had taken what it called unprecedented steps to reject standalone drug plan bids with steep year-over-year premium increases or reduced benefits.

In a February report, the Government Accountability Office said CMS officials estimated the demonstration would cost $9.8 billion across 2025 and 2026, and that nearly all plan sponsors opted to participate. GAO found that without the program, monthly premiums for beneficiaries who stayed in their 2024 plan would have nearly doubled on average last year. Average standalone plan premiums for beneficiaries not eligible for the low-income subsidy instead rose from $42 in 2024 to $43 in 2025.

The number of standalone prescription drug plans fell to 360 nationwide in 2026 from 464 in 2025, according to KFF. About 58% of Part D enrollees received drug coverage through MA plans in 2025, compared with 42% in standalone plans.

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