Friday, September 25, 2026 |
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The Last Page.
The last page, first.
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How Medicare’s $9.8 Billion Discount Ends
For two years the government held down what a Medicare drug plan could charge, and that stops on January 1. The people who count these premiums for a living do not agree on what happens next.
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The story
Your drug plan has been running with a federal thumb on the scale. For 2025 and 2026 the government cut the benchmark premium and capped what any plan could add in a year.
KFF put the two-year cost at $9.8 billion. On July 28 the Centers for Medicare and Medicaid Services said it would stop. The agency wants Part D back under what it called traditional market conditions.
Traditional meaning unsubsidized.
Administrator Mehmet Oz called the old arrangement billions of taxpayer dollars handed straight to insurance companies. He says more than nine in ten people on Medicare will still find drug coverage under $10 a month.
Juliette Cubanski directs Medicare policy at KFF. She wrote on July 29 that some stand-alone plan enrollees could face their biggest premium jump in years.
Both men are describing the same January. One of them is describing your plan.
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$38.99
The base drug premium the government published for this year.
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$41.33
Next year’s, up six percent, which is all the law lets it rise.
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$94.06
What the same formula produced before the cap, in Medicare’s own July announcement.
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Base premium
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The government’s benchmark for drug coverage. Your own plan’s price starts from it and then moves with how that plan bid against the national average.
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Best case
JANUARY 2027. Your plan renewed at a price you can live with. The big carriers wanted the members more than the margin, so the bids came in defensive. A few dollars a month.
On the same January 1, Medicare’s negotiated prices took effect on fifteen more drugs. Ozempic and Wegovy are on that list, and so is the inhaler your brother-in-law complains about.
Your out-of-pocket ceiling is $2,400 now. Three years ago there was no ceiling at all, and a bad year ran to whatever the counter asked. So you pay until you reach the number, and then you stop paying until next winter.
The letter that came before the enrollment window did say the premium was going up. It went up the way a phone bill goes up, and by March you had stopped thinking about it.
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Worst case
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MARCH 2027. The notice came at the end of September and you filed it with the insurance papers. It said the monthly premium was moving from the low forties to something starting with a nine. No limit on the increase this time.
In 2025 a plan could raise your premium by $35 in a year. In 2026 the limit was $50. For 2027 there is no limit at all.
You let it ride, because the window ran from October 15 to December 7 and November got away from you. The plan renewed itself, which is what plans do. Another fifty a month is six hundred on the year.
The pill that sat on your plan’s covered list in December now needs the insurer’s permission first. The pharmacist is saying the same thing to the man ahead of you in line. Next chance to change anything: October.
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How it ends
You get a bigger drug bill and one short window to fix it, unless your September notice lands near the government’s number.
The price of the benefit never fell.
For two years the taxpayer carried a piece of it, and plans held their increases inside a number the agency set. Both halves, gone together.
The bids plans filed this summer averaged $296.05 a month to provide the coverage, up twenty-four percent in a year. Congress capped the growth in the published base premium at six percent a year. What a plan may charge you sits outside that cap.
Oz is right about the ten-dollar plans, and it matters who he is right about. Most people on Medicare Advantage already buy drug coverage inside one premium, and that piece averaged eight dollars this year. The exposure sits with the 24.9 million Americans holding a stand-alone drug plan.
They are the ones who kept original Medicare on purpose. Auto-renewal is their default and always has been. It is the most expensive habit in the program, and it costs nothing to break.
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Your plan has to mail its Annual Notice of Change by September 30, which is Wednesday. Put next year’s monthly premium beside this year’s on the same page. Any increase over $50 is one the old rule would have blocked.
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One story a morning, finished instead of left open. If that is not what you wanted, the way out is below.
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The Last Page.
The last page, first. Reply and name the story you want finished.
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