LUGPA Policy Alert - CMS Ends Medicare Part D Premium Stabilization Demonstration After 2026

August 2026

At a Glance

What Happened:
The Centers for Medicare & Medicaid Services (CMS) announced that the Medicare Part D Premium Stabilization Demonstration Program will expire at the end of calendar year 2026 and will not continue into 2027.

Why It Matters:
The temporary demonstration provided billions of dollars in federal support to stabilize stand-alone Medicare prescription drug plan premiums following implementation of the Inflation Reduction Act’s Medicare Part D redesign. The end of the program could result in higher premiums or greater variation in Part D plan costs for some Medicare beneficiaries beginning in 2027.

Potential Impact on LUGPA Members:
Changes to Medicare Part D premiums and plan affordability may affect patients receiving treatment for complex urologic conditions, including prostate cancer and other conditions requiring ongoing prescription therapies. While the policy does not directly affect physician reimbursement, increased prescription drug costs could create additional barriers to patient access and treatment adherence.

Background

The Centers for Medicare & Medicaid Services (CMS) announced that the Medicare Part D Premium Stabilization Demonstration Program will conclude after calendar year 2026 and will not be extended into 2027.

The temporary demonstration was established in 2025 following significant changes to the Medicare Part D benefit under the Inflation Reduction Act (IRA). The IRA redesign reduced beneficiary out-of-pocket prescription drug costs and shifted additional financial responsibility to Part D plans, creating concerns about premium increases and market stability.

The demonstration provided financial support to participating stand-alone Medicare prescription drug plans to reduce premium volatility and help plans adjust to the redesigned benefit. CMS provided approximately $6.2 billion in 2025 and $3.6 billion in 2026 in premium stabilization support.

CMS has stated that the Part D market has adjusted to the redesigned benefit and that additional stabilization funding is no longer necessary.

Key Changes

End of Premium Stabilization Support

• The Part D Premium Stabilization Demonstration will expire after 2026.
• Stand-alone Medicare prescription drug plans will develop 2027 premiums without additional federal stabilization funding.

Potential Premium Impact

• Some beneficiaries may experience higher monthly premiums as plans adjust to the end of federal support.
• Administration officials have indicated that many beneficiaries will continue to have access to affordable Part D options.
• Final 2027 Part D premiums and plan offerings will be released by CMS in September ahead of Medicare Open Enrollment.

Part D Protections Remain in Place

• The Medicare Part D redesign provisions established by the IRA remain in effect.
• Beneficiary protections limiting annual out-of-pocket prescription drug costs will continue despite the expiration of the demonstration program.

LUGPA Perspective

LUGPA supports policies that protect patient access to affordable medications and reduce financial barriers to medically necessary care.

Many patients treated by independent urology practices rely on Medicare Part D coverage for prescription therapies related to cancer, chronic disease management, and other urologic conditions. Changes in premiums, formularies, or cost-sharing requirements may affect patients’ ability to access and remain on prescribed therapies.

Although the expiration of the Part D Premium Stabilization Demonstration does not directly impact physician reimbursement or Medicare Fee Schedule policies, LUGPA will continue monitoring changes to Medicare prescription drug benefits and their potential effects on patient access and independent urology practices.

Next Steps

LUGPA will continue monitoring CY 2027 Medicare Part D plan premiums, benefit designs, and beneficiary impacts following CMS’s release of final plan information.

LUGPA members are encouraged to share any concerns regarding prescription drug affordability, coverage changes, or patient access barriers to help inform future advocacy efforts.