4. Expiration of Federal Part D Premium Stabilization Subsidies

Federal premium relief is coming to an end. The temporary Part D Premium Stabilization Demonstration expires on December 31, 2026, removing a key financial cushion for private plan sponsors.

This federal program subsidized monthly plan premiums by an average of $16 per beneficiary throughout 2026. The subsidy softened the pricing shock as private insurers absorbed higher liability under the drug spending caps.

Statutory rules limit base beneficiary premium growth to 6% per year, setting the projected 2027 Part D base premium at $41.33. That is up from $38.99 in 2026.

However, private insurance carriers can still raise individual plan premiums above that benchmark. Without federal subsidies, many standalone plans may reprice premiums upward or trim formulary coverage.