Is Medicare Part D Going Away? What the Subsidy Change Actually Means

Short version: Medicare Part D is not going away. A temporary program that helped hold down Part D premiums is ending, and a lot of the coverage has blurred those two things together. If you take prescriptions and you are on Medicare, here is what actually changed and what it means for your wallet.

What is actually ending

The program is called the Part D Premium Stabilization Demonstration. It started in 2025 and paid prescription drug insurers to keep monthly premiums from spiking while they adjusted to changes from the Inflation Reduction Act, including the new annual cap on out-of-pocket drug costs.

In late July 2026, the Centers for Medicare and Medicaid Services announced the program would end after the 2026 plan year. It terminates on January 1, 2027. Medicare Part D, the prescription drug benefit itself, continues exactly as it is.

Who this affects

• Affected: people with a stand-alone Part D prescription drug plan alongside Original Medicare. Roughly 23 million people are in those plans.
• Not affected: people who get drug coverage through a Medicare Advantage plan. Advantage plans were never part of the demonstration.
• Not affected: people receiving Extra Help, the low-income subsidy. That program is not ending.

What it could cost you

Nobody knows your exact number yet, and the honest answer is that it depends on your plan and your state. Here is what is on the record.

CMS says premiums will rise by less than $10 a month for most beneficiaries, and that some people will pay less. A federal report found premiums ran about $16 a month lower this year than they would have without the subsidy. Independent analysis has put the likely 2027 increase at no more than $20 a month for most people. For reference, the average basic stand-alone Part D premium in 2026 is about $34.50 a month.

Real numbers arrive when insurers publish their 2027 premiums and plan details. Watch for the Annual Notice of Change letter from your plan.

What is not changing

• The annual cap on what you pay out of pocket for covered Part D drugs, $2,100 in 2026, stays in place.
• Extra Help is not ending.
• Part D plans still work the same way: a deductible of up to $615, then roughly 25 percent coinsurance until you reach the cap, then catastrophic coverage for the rest of the calendar year.

The mistake that costs the most

Every time Medicare drug costs make the news, people start asking whether they should just drop Part D and pay cash. Before you consider it, understand the penalty.

If you go 63 days or more without Part D or other coverage that Medicare considers creditable, you get a late enrollment penalty. It is 1 percent of the national base beneficiary premium, which is $38.99 in 2026, multiplied by every full month you went uncovered. It is added to your premium for as long as you have Medicare drug coverage, it follows you when you switch plans, and it is recalculated every year as the base premium changes. A two year gap runs about $9.40 a month, permanently.

A telehealth membership is not creditable coverage. Ours is not, and neither is anyone else's. Any company that suggests you can drop Part D because their prescriptions are cheaper is setting you up for a bill you will pay for the rest of your life.

Where a membership like ours fits

Not as a replacement. As a way to stop paying out of pocket for the everyday prescriptions you refill every month.

Keep your Part D. Then look at what you are actually spending before your deductible clears. A Fit For Duty Rx membership includes unlimited visits with a licensed provider, and medications on our formulary are provided at no additional cost when a provider determines they are appropriate and prescribes them. The formulary is heavy on the common maintenance generics for blood pressure, cholesterol, thyroid and diabetes. You can search the full formulary to see whether your prescriptions are on it.

One thing worth being straight about, because it matters to some people and not to others. Prescriptions you obtain outside your Part D plan generally do not count toward that $2,100 out-of-pocket cap. If you take an expensive specialty drug and expect to reach the cap anyway, filling your generics elsewhere may not save you anything. If you are like most people, taking a handful of routine generics and never coming close to the cap, that is money you are not getting back.

What to do next

1. Read your Annual Notice of Change when it arrives. It tells you your 2027 premium, deductible and formulary changes.
2. Compare plans during Medicare Open Enrollment, which runs October 15 through December 7. Switching is free. Doing nothing means you keep whatever your plan becomes in 2027.
3. Check whether you qualify for Extra Help. Many people who are eligible have never applied, and while you are getting it you are not charged the late enrollment penalty.
4. Do not drop Part D. See above.
5. Add up what you paid at the pharmacy counter last year before your deductible cleared. That number tells you whether a membership is worth it for you.

If you want help figuring out whether your prescriptions are on the formulary, reach out to us. If you are having a medical emergency or a reaction to a medication, call 911.