{"id":85,"date":"2019-06-07T15:15:38","date_gmt":"2019-06-07T19:15:38","guid":{"rendered":"https:\/\/singlecare.com\/blog\/?p=85"},"modified":"2026-01-02T13:20:18","modified_gmt":"2026-01-02T18:20:18","slug":"medicare-donut-hole","status":"publish","type":"post","link":"https:\/\/www.singlecare.com\/blog\/medicare-donut-hole\/","title":{"rendered":"No more donut hole! Medicare coverage gap eliminated in 2025"},"content":{"rendered":"

Update: The Medicare coverage gap, also known as the \u201cdonut hole,\u201d was eliminated on Jan. 1, 2025. The remainder of this article\u2019s content provides context as to what the Medicare donut hole was when it was in effect.<\/span><\/b><\/p>\n

Donuts are great: They\u2019re delicious and tasty treats. The donut hole, or the Medicare prescription drug coverage gap, which many people with Medicare fell into, was not great.\u00a0<\/span><\/p>\n

What was the donut hole in Medicare?<\/span><\/h2>\n

You may have heard the term in the past.<\/span><\/p>\n

\u201cThe idea was that once you [and your plan] reached a pre-specified amount of spending on your prescription drugs, you had to pay for 100% of your prescriptions until you reached another pre-specified amount,\u201d says <\/span>Maria Polyakova<\/span><\/a>, Assistant Professor of Health Policy at Stanford School of Medicine and a Faculty Fellow at Stanford Institute for Economic Policy Research.<\/span><\/p>\n

However, the Medicare coverage gap, or donut hole, was eliminated as of January 1, 2025.\u00a0<\/span><\/p>\n

In 2024, you and your plan had to spend $5,030 in total on drugs 2024 to get to the donut hole. And if you got there, you paid 25%, not 100%, for your prescriptions.<\/span><\/p>\n

You may be wondering why Medicare would have a donut hole at all. While the coverage gap closed in the years leading up to 2024 thanks to the Affordable Care Act (ACA), it was intended as a way to keep the cost of the program down when it was first passed by Congress. Here is a breakdown of what you could expect to pay in 2024 and what prices have been in previous years.<\/span><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

What was the Medicare Part D donut hole for 2024?<\/span><\/span><\/h2>\n<\/th>\n<\/tr>\n<\/thead>\n

Coverage stage<\/b><\/td>\n2024<\/b><\/td>\n2023<\/b><\/td>\n2022<\/b><\/td>\n<\/tr>\n
Deductible<\/span><\/td>\n$0-$545<\/span><\/td>\n$0-$505<\/span><\/td>\n$0-$480<\/span><\/td>\n<\/tr>\n
Coverage starts after you reach your deductible<\/span><\/td>\n<\/tr>\n
Initial coverage limit<\/span><\/td>\nYou\u2019ll reach the initial coverage limit when you and your plan pay\u2026<\/span><\/td>\n<\/tr>\n
$5,030<\/span><\/td>\n$4,660<\/span><\/td>\n4,430<\/span><\/td>\n<\/tr>\n
Coverage gap<\/span><\/td>\nYou\u2019ll pay 25% of drug costs until you and your plan spend \u2026<\/span><\/td>\n<\/tr>\n
$8,000<\/span><\/td>\n$7,400<\/span><\/td>\n$4,430<\/span><\/td>\n<\/tr>\n
Catastrophic coverage<\/span><\/td>\nAfter you\u2019ve spent $8,000, you pay no further cost-sharing<\/span><\/td>\nWhen your spending and manufacturer discounts reach $7,400, you\u2019ll pay 5% for drugs or $4.15 for generics and $10.35 for brand-name drugs\u2014whichever is greater<\/span><\/td>\nWhen your spending and manufacturer discounts reach $7,050, you\u2019ll pay 5% for drugs or $3.70 for generics and $9.20 for brand-name drugs\u2014whichever is greater<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Source: <\/span><\/i>Medicare changes<\/span><\/i><\/a><\/p>\n

Why was the donut hole eliminated in 2025?<\/span><\/h2>\n

The goal is to reduce out-of-pocket spending and make it easier for Medicare recipients to afford their medications. The change was a provision in the <\/span>Inflation Reduction Act<\/span><\/a>.<\/span><\/p>\n

Who was affected by the donut hole?<\/span><\/h2>\n

The federal government sets coverage phases for Medicare Part D consumers for how their drugs will be paid for throughout the year.<\/span><\/p>\n

Prior to 2025, you entered the donut hole when the total cost of your prescription drugs reached a predetermined combined cost. In 2024, that cost was $5,030. At that point, you would have paid a percentage of medication costs (25% in 2024) while you were in the Medicare donut hole.<\/span><\/p>\n

The donut hole did not affect all Medicare beneficiaries. If you had Original Medicare only (Parts A and B) and didn\u2019t have a Medicare prescription drug plan (Part D or a <\/span>Medicare Advantage plan<\/span><\/a> that includes Part D), the donut hole did not affect you.\u00a0<\/span><\/p>\n

If you had a Medicare prescription drug plan but total drug costs never reached $5,030 on covered medications, you were not affected by the donut hole.\u00a0<\/span><\/p>\n

Also, if you qualify for Extra Help, the donut hole never affected you.<\/span><\/p>\n

What happened when you entered the donut hole?<\/span><\/h2>\n

If you found yourself in the Medicare donut hole, you needed to hit your out-of-pocket threshold. Once you met that cost, which was $8,000 in 2024, you had no further cost sharing. Specific costs were counted toward meeting this threshold to get out of the Medicare coverage gap.<\/span><\/p>\n

Costs that counted toward getting out of the coverage gap include:<\/span><\/h3>\n