The Part D prescription drug “Donut Hole” Coverage Gap usually changes every year but new rules have drastically reduced how much you will pay in the Donut Hole and for Catastrophic coverage moving forward. Learn how the Donut Hole works and how much you will pay for Medicare Part D prescription drugs in 2024.

If you hit the Medicare Part D Donut Hole, you will usually pay 25% of your drug costs

What Is the Medicare Part D Donut Hole and how has it changed?

The Donut Hole is the nickname the Coverage Gap; One of the 4 stages of Part D payments you will make when receiving prescription drugs (see below). This is the period when prescription drugs are usually subsidized by 75% (meaning you will pay roughly %25 percent during this time).

In 2024, the Donut Hole starts when you reach $5,030 in prescription costs. Part D members will also have a new maximum Part D deductible of $545.

How Part D and the Donut Hole Works in 2024

There are four stages to Medicare Part D coverage. The amount you pay for medicines and the amount your plan covers changes from one stage to the next as your drug expenditures accumulate throughout the year.

1) Deductible Stage: 

You pay all your drug expenses up to the plan’s deductible maximum of $545, if applicable (not all plans have deductibles and some waive the deductible for generic drugs).

2) Initial Coverage Stage: 

This stage begins after you have satisfied your deductible if applicable. During this stage, your drug plan will cover some, most, or all of your prescription costs. Some generic drugs may be free but you will usually pay a certain amount either as a copay (like $5 flat fee), or coinsurance (like 15% of the cost of the drug), for your prescriptions while in this stage.

3) Donut Hole Stage (AKA Coverage Gap)

Officially called the Coverage Gap, the Donut Hole stage begins once you and the plan reach a combined $5,030 in prescription costs. You will pay 25% coinsurance for covered generic and brand-name medications while you are in the Coverage Gap. Your plan (and the drug manufacturer will pay 75% of this cost.

4) Catastrophic Coverage Stage: 

The Catastrophic Coverage Stage begins after you and your plan have spent $8,000 in expenses. You will have no more copays or coinsurance once you hit this amount. In the past, you were required to pay roughly 5% for all drugs in the Catastrophic Coverage Stage. That number is now $0. Learn more here.

New Maximum Out-Of-Pocket for Part D Drugs

A new ruling states that in 2025, you’ll pay no more than $2,000 in out-of-pocket costs for prescription drugs covered by your Part D drug plan.

Step-by-step Part D PERSONALIZED quote and enrollment guide

Now that you understand the Part D donut hole, here’s how to get an accurate Part D quote with the easy step-by-step how-to guide. The guide lets you enter your prescriptions and favorite pharmacies to find out your personalized quote. If you’re ready to go, you can enroll completely online.

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