For Two Years a Federal Program Capped Your Drug Plan Increase at $50. It Ends December 31.

For the past two years a federal program has limited how much a standalone Medicare drug plan could raise your premium in a single year. In 2026 that limit was $50. It disappears on December 31.

CMS announced on July 28 that it will discontinue the Part D Premium Stabilization Demonstration at the end of this year, saying plan sponsors now have “sufficient experience under the redesigned Part D benefit” and that the move returns the program “to operating under traditional market conditions in CY 2027.”

What the Program Actually Did

Two things, according to KFF. It reduced the base premium used to calculate what individual plans charge, and it capped year-over-year increases outright.

Both shrank as it went. The base premium reduction was $15 in 2025 and $10 in 2026. The average subsidy worked out to about $26 a month per enrollee in 2025 and about $16 in 2026. The cap on any single plan’s increase was $35 in 2025 and $50 in 2026. The whole thing cost $9.8 billion across the two years.

The Numbers for Next Year

CMS set the 2027 national average monthly bid amount at $296.05 and the base beneficiary premium at $41.33.

The base premium is not unprotected. Under the Inflation Reduction Act, its annual increase is capped at 6 percent a year through 2029. What is going away is the separate demonstration that held down what individual plans could charge on top of it.

KFF’s read is blunt: some standalone drug plan enrollees “could face a larger premium increase for drug coverage next year than in recent years.”

Who This Reaches

Enrollment in standalone Part D plans has grown from 22.8 million in 2024 to 24.9 million in 2026. Those are the plans affected.

The gap between them and drug coverage bundled into Medicare Advantage is already wide. In 2026 the average standalone drug plan premium is $36 a month. The average for a Medicare Advantage drug plan is $8.

What to Watch and When

Plan-level premiums for 2027 publish before open enrollment, which runs October 15 to December 7. New premiums take effect January 1.

The number in that letter is the one that matters, and for the first time in two years there is no separate ceiling sitting above it.

References: Centers for Medicare and Medicaid Services | KFF