The Biden Administration officially eliminated the Medicare Part D "donut hole" (coverage gap) as of January 1, 2025, through provisions in the Inflation Reduction Act (IRA) of 2022. This change replaces the gap with a maximum $2,000 yearly cap on out-of-pocket prescription drug costs.
Starting in 2010, the ACA started closing the donut hole, and through 2019, the percentage that beneficiaries paid out of pocket for medications while in the donut hole gradually decreased.
Yes, President Biden's administration, through the Inflation Reduction Act (IRA), effectively eliminated the Medicare Part D "donut hole" (coverage gap) starting in 2025, replacing it with a simpler structure that includes a $2,000 annual out-of-pocket spending cap and no further drug costs for the rest of the year once that cap is met.
The Inflation Reduction Act (IRA) signed by President Biden in 2022 will eliminate the Prescription Drugs Coverage Gap (known as the donut hole) for Seniors in 2025. Most Medicare drug plans have a coverage gap (also called the "donut hole").
The Medicare Part D donut hole or coverage gap phase of coverage no longer exists as of December 31, 2024. It was the coverage phase after the initial coverage period when you owed a higher or different percentage of the cost of your drugs.
Tips on How to Avoid the Donut Hole Coverage Gap
Discuss lower-cost drug alternatives with your healthcare professionals. Seek out discounts on medications. Choose generic drugs over brand-name drugs. Opt for in-network pharmacies only.
In the donut hole, you pay a percentage of the cost for your prescription drugs. For generic drugs, you pay 25% of the cost of the drug and dispensing fee, and your plan pays the remaining cost.
GoodRx can't be used in combination with Medicare, but it can be used in place of Medicare. You may want to consider using GoodRx instead of Medicare when Medicare doesn't cover your medication, when you won't reach your annual deductible, or when you're in the coverage gap phase (“donut hole”) of your Medicare plan.
Summary. The Medicare Part D donut hole was a term to describe the prescription coverage gap. However, as of 2025, Medicare closed the donut hole. Medicare replaced it with an out-of-pocket spending cap.
The donut hole of no coverage finally closed for good in 2020, having phased out in 2019 for brand-name drugs and in 2020 for generic drugs. Sign up for the latest health news, fitness and nutrition updates and more!
The estimated average enrollment-weighted monthly premium for Medicare Part D stand-alone PDPs is projected to be $45 in 2025, a modest increase from $42 in 2024 (based on June 2024 enrollment).
Yes, President Biden's administration, through the Inflation Reduction Act (IRA), effectively eliminated the Medicare Part D "donut hole" (coverage gap) starting in 2025, replacing it with a simpler structure that includes a $2,000 annual out-of-pocket spending cap and no further drug costs for the rest of the year once that cap is met.
If you don't sign up for a Part D plan when you are first eligible to do so, and you decide later you want to sign up, you will be required to pay a late enrollment penalty equal to 1% of the national average premium amount for every month you didn't have coverage as good as the standard Part D benefit.
The extra $144 added to Social Security usually comes from the Medicare Part B Giveback benefit, offered by some Medicare Advantage (Part C) plans, which pays back some or all your Part B premium, showing up as extra money in your check if it's deducted from your Social Security. To qualify, you need Original Medicare (Parts A & B), pay your own Part B premium, live in a plan's service area, and enroll in a specific Medicare Advantage plan that offers this "rebate," with the amount varying by plan and location.
Insurance & Medicare
You can use a GoodRx discount instead of your prescription insurance or Medicare if the cost is lower. However, GoodRx cannot be combined with your insurance or any federal or state-funded program such as Medicare or Medicaid.
First, you can opt for generic medications instead of name-brand ones. Second, see if your doctor can give you free samples, and third, you might consider paying cash for your more expensive meds. These are just a few of the things you can do to avoid the donut hole stage.
For 2026, the standard Medicare Part B premium is $202.90/month, an increase from 2025, with higher premiums for higher incomes (IRMAA), and the Part A deductible is $1,736, while Part D drug plan base costs start around $38.99/month, with potential surcharges for high earners. These costs are set by CMS and reflect rising healthcare expenses, impacting beneficiaries across Original Medicare (A & B) and Medicare Advantage/Part D plans.
Captain Hanson Crockett Gregory, a 16-year-old sailor from Maine, is widely credited with inventing the doughnut hole in 1847 by using a pepper can to cut the center out of fried dough to ensure it cooked evenly, solving the problem of raw centers in "frycakes". While he created the concept of the hole, he didn't commercialize the small, doughy balls we know today; that happened much later, with Dunkin' Donuts popularizing them as "Munchkins" in the 1970s from dough scraps, notes Wikipedia.