Sixty-one years after President Lyndon B. Johnson signed Medicare into law, the program has over 70 million enrollees and enormous support among the public. Medicare is so popular that the program and Social Security are considered the “third rail of politics.” Any lawmakers who threaten these programs are at risk of political death. Suffice it to say, announcing a reduction in Medicare benefits — even a fairly modest decrease — in the second half of an election year isn’t the traditional political path. And yet, the Trump administration is again rolling back access to seniors’ healthcare access. The Centers for Medicare & Medicaid Services announced Tuesday that it will end a subsidy program to stabilize premiums of Medicare Part D prescription drug plans, in which nearly 25 million people are enrolled.
Medicare Part D was established through the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. Unlike traditional Medicare, which does not cover most outpatient prescription drugs, Medicare Part D offers stand-alone prescription drug plans through private insurers.
The subsidy elimination also aligns with the administration’s broader efforts to reduce social spending.
Roughly 9 in 10 seniors take prescription drugs, and many of them take multiple prescription drugs. Given that Americans pay markedly higher prices for prescriptions than do people in high-income peer countries, promoting affordable prescription drugs is essential. Nearly a quarter of seniors report difficulty affording their prescriptions, and 7% of seniors ration or do not fill prescriptions due to their cost. Starting last year, the Inflation Reduction Act capped Medicare enrollees’ out-of-pocket drug spending. The subsidies, which the Biden administration set up to offset increases in premiums, were supposed to run through at least 2027, but CMS is now moving to end them early.
Though the average cost of a Medicare Part D drug plan is $36 per month, it varies widely by plan. What’s more, premiums are vulnerable to growing expenses for GLP-1’s and other specialty drugs. So, while the subsidies go to participating insurers, they are especially beneficial for seniors, who tend to have less disposable income. The subsidies work to shield Part D enrollees from larger increases, reducing the average premium by 40% in 2025.
The timing is nothing short of ironic. Open enrollment for Medicare Part D coverage begins on Oct. 15. Less than three weeks before the midterm elections, America’s most reliable voting bloc will receive notice of higher healthcare costs.
What’s more, this policy shift undercuts Trump’s expressed commitment to prescription drug affordability, the rare healthcare issue on which the White House has sought to claim the political high ground despite Americans’ broader trust of Democrats on health care issues.
To be sure, there is widespread skepticism as to whether the administration can deliver any promised substantial savings: Ideas like TrumpRx, a direct-to-consumer drug portal, and most favored nation drug pricing have shown little progress. But politically, Trump and his team acknowledged a genuine problem: Americans pay more for prescription drugs than do patients in comparable countries.
Eliminating the subsidies, however, moves in precisely the opposite direction. So, what is the White House thinking?
The administration argues that premium stabilization has already fulfilled its temporary purpose, such that, according to CMS Administrator Mehmet Oz, “this bailout is no longer needed.” The White House asserted to the Wall Street Journal that ending the subsidies will largely lead seniors to pay only up to $20 per month more for prescription drug coverage. However, researchers at KFF estimate that some Part D enrollees may face larger but unknown costs of coverage next year, part of a broader trend of Americans’ increased healthcare costs.
This is not Trump’s first puzzling health policy move that seems to fly in the face of public opinion.
The subsidy elimination also aligns with the administration’s broader efforts to reduce social spending, most notably through the historic Medicaid and SNAP cuts in last year’s “big, beautiful bill.” And like this broad retrenchment of the American safety net, this change is aimed at low-income seniors, who are disproportionately Black and Hispanic. Though assistance with securing health coverage is a critical helping hand and not an unnecessary handout, the administration, marked by plutocratic leanings and personal responsibility narratives, may view this subsidy as yet another type of government intervention that should be pared back despite its popularity.
Of course, this is not Trump’s first puzzling health policy move that seems to fly in the face of public opinion. In a recent KFF poll, prior authorization (i.e. needing insurers’ approval for procedures, tests or drugs) ranked first among Americans’ healthcare challenges. Yet earlier this year, the Trump administration introduced new prior authorization requirements, administered through artificial intelligence programs, to traditional Medicare through the Wasteful and Inappropriate Services Reduction, or WISeR, model.
This policy shift, the pilot stage of which rolled out across six states in January, was troubling from its inception. As I wrote for MS NOW last year, prior authorization can operate as a key vehicle for delays and denials of health coverage, which are highly burdensome to appeal, and which may be especially onerous for seniors to navigate because they may have lower health literacy. These new prior authorization reviews may lead to more inappropriate denials, as opposed to appropriate guardrails on overprescribing. The WISeR model works with third-party tech companies that receive greater payment for issuing denials, and while they are evaluated on other metrics as well, this payment structure can fuel perverse incentives that exacerbate healthcare barriers.
The preliminary findings from the pilot program are alarming. In Washington, one of the six states participating in the pilot program, seniors are waiting two to four times longer for approval of prescribed tests and treatments. Concerns about these health barriers are so pronounced that last month, the House Appropriations Committee voted unanimously to block continued funding toward WISeR.
Before Medicare was enacted 60 years ago, its opponents, including the American Medical Association, decried the program as “socialized medicine.” But its progress in delivering needed healthcare for America’s seniors contributed to a decades-long political consensus that the program should remain largely untouchable. The White House’s new policies, however, suggest a willingness to expose Medicare enrollees to greater financial and administrative burdens in the name of fiscal restraint. In a critical election year, the Trump administration appears intent on testing whether this third rail still shocks.
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