New York Governor Kathy Hochul (D) is not happy with President Donald Trump's decision to end a Medicare subsidy program. In a video posted on X Wednesday, she said the move will raise prescription drug costs for about 1.3 million New Yorkers, and she's making it clear that seniors shouldn't have to pick up the tab.

"There's now a new assault on seniors," Hochul said in the video. "The Trump administration is now taking away a subsidy for prescription drugs so your monthly premiums will now go up."

Hochul also took aim at the administration's earlier promises to lower costs, noting that Americans were told prescription drugs, groceries, and other everyday expenses would become more affordable. Instead, she argued, this move does the opposite.

Why Hochul Is Pushing Back

The core issue is the Medicare Part D Premium Stabilization Demonstration, a federal subsidy that helped keep prescription drug premiums lower. The Centers for Medicare & Medicaid Services (CMS) recently confirmed it will end the program after the 2026 plan year, saying it's no longer necessary because insurers now have enough experience operating under the redesigned Medicare drug benefit.

CMS Administrator Dr. Mehmet Oz defended the decision, calling the subsidy a "bailout" and saying most Medicare beneficiaries would see premium increases of less than $10 a month. Others, he noted, could see premiums stay flat or even drop.

But Hochul isn't buying it. She highlighted several steps New York has taken to reduce healthcare costs, including expanding the state's Medicare Savings Program, which she says helps eligible seniors save more than $7,000 annually. She also pointed out that New York eliminated insulin copays, saving residents about $25 million, and expanded coverage for EpiPens, cancer screenings, and early detection services.

"Our seniors shouldn't have to foot the bill," Hochul said.

The Bigger Picture on Medicare Costs

This debate comes at a time when healthcare affordability is a growing concern for retirees. According to the latest Medicare Trustees Report, Medicare Part B spending is projected to grow 8.5% annually through 2030, while Medicare Part D spending could rise 9.4% annually. That's adding pressure on premiums across the board.

The subsidy cut is part of a broader prescription drug agenda from the administration. CMS has already expanded the next round of Medicare drug price negotiations to include 15 additional high-cost medicines from companies including Eli Lilly And Co. (LLY), Pfizer Inc. (PFE), AbbVie Inc. (ABBV), Gilead Sciences, Inc. (GILD), and Johnson & Johnson (JNJ), saying the effort is aimed at lowering drug costs for Medicare beneficiaries.

Hochul argued that New York will continue pursuing policies aimed at lowering healthcare costs while helping residents afford prescription drugs and other essential medical care. For now, though, the fight over this subsidy is far from over.

Disclaimer: This content was produced with the help of AI tools and was reviewed and published by MarketDash editors.

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