Democratic lawmakers want Congress to extend Medicare Part D’s premium stabilization program, which was created to shield seniors from sharp premium increases as the prescription drug benefit underwent major changes.
Congress should let the program expire as planned after 2026. The Centers for Medicare and Medicaid Services says Part D insurers now have sufficient experience with the redesigned benefit to return to traditional market conditions in 2027.
The premium stabilization demonstration was created to smooth the transition to the Inflation Reduction Act’s redesigned Part D benefit. It began in 2025 and continued, with reduced stabilization, in 2026 as insurers adjusted to the new rules.
The program has served its transitional purpose. The Government Accountability Office found that it helped keep premiums relatively stable in 2025, while CMS has concluded that insurers now have enough experience with the redesigned benefit to operate without additional stabilization. Extending the program through 2029 would turn a temporary intervention into a longer-term feature of Medicare.
That matters because Medicare already faces enormous long-term fiscal pressures. The CBO projects that net Medicare outlays will rise from $1.1 trillion in 2026 to $2 trillion in 2036. Medicare accounts for about 75% of the projected increase in spending on major federal healthcare programs over the 2027 to 2036 period.
The answer to rising healthcare costs cannot always be another federal subsidy. Subsidizing premiums can reduce what beneficiaries pay upfront, but the underlying cost does not disappear. It is shifted to taxpayers and, ultimately, to future generations.
Congress should not confuse lower premiums with lower healthcare costs. If policymakers want Medicare to become more sustainable, they need to focus on the incentives that determine how healthcare is priced, purchased, and delivered. That means giving consumers more control over healthcare spending through health savings accounts, encouraging greater competition among insurers and providers, and removing unnecessary individual mandates.
The stakes extend beyond this one program. CBO projects that federal health insurance subsidies will total $33.6 trillion from 2026 through 2036, with Medicare accounting for $16.1 trillion, or 48%, of the total. Since the pandemic, Congress has repeatedly relied on temporary measures to cushion the public from rising healthcare costs, including expanded Affordable Care Act premium tax credits and Medicare premium protections.
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Congress should be wary of turning every temporary intervention into a permanent feature of federal policy. Once a subsidy becomes part of the status quo, allowing it to expire can become politically harder than creating it in the first place. What begins as a response to an unusual transition can gradually become an expectation that taxpayers will continue funding.
The Part D stabilization program was meant to smooth a transition, not become a permanent fixture. It’s time to return to normal. Congress should let the temporary subsidy expire before “temporary” becomes another word for permanent.
Sam Raus is the David Boaz Resident Writing Fellow at Young Voices. Follow him on X: @SamRaus1.