In the Medicare Part D "donut hole" (before it was eliminated in 2025), beneficiaries paid 25% of the cost for both brand-name and generic drugs. For brand-name drugs, the manufacturer provided a 70% discount, while the plan covered the remaining 5%. As of January 1, 2025, the donut hole is eliminated, replaced by a $2,000 annual cap on out-of-pocket prescription costs.
No, the infamous donut hole — when Medicare beneficiaries with Part D prescription drug coverage had to pay 100 percent of their drug costs until they reached a certain threshold — has closed.
As of 2025, the Medicare Part D “donut hole” no longer exists – meaning there is no longer a coverage gap during which Part D enrollees face higher drug costs. The “donut hole” was eliminated thanks to provisions of the Affordable Care Act (ACA) and the Inflation Reduction Act (IRA).
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.
Through 2024, if you spent a certain amount on prescription drugs, you'd enter the Part D "donut hole" or coverage gap. As of 2025, the Medicare Part D coverage gap is eliminated. Learn about important changes to Medicare Part D coverage that are happening in 2025.
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.
Social Security takes and decides applications for Extra Help with Medicare Prescription Drug Plan Costs, a provision to subsidize costs for Part D prescription drug plans for qualifying low income applicants.
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.
Yes, the Medicare Part D donut hole (coverage gap) is officially gone as of January 1, 2025, eliminated by the Inflation Reduction Act (IRA), simplifying coverage into three phases: deductible, initial coverage, and catastrophic, with a new $2,000 out-of-pocket spending cap for covered drugs in 2025.
Yes, the Biden administration, through the Inflation Reduction Act (IRA) signed in 2022, eliminated the Medicare Part D "donut hole" (coverage gap) as of January 1, 2025, replacing it with a simpler structure that includes a $2,000 out-of-pocket cap on drug costs for the year, after which beneficiaries pay nothing for covered drugs. This change means beneficiaries now move directly from initial coverage to catastrophic coverage, simplifying costs and providing significant financial relief.
How do you avoid the Medicare donut hole coverage gap? All Medicare Part D plans come with a donut hole, so the only way to avoid it is to try and stay under the threshold needed to avoid paying a significant out-of-pocket amount for prescription drugs.
The cost of drugs purchased under GoodRx will not count against your coverage limit - thus keeping you out of the donut hole longer. It's important to note that the amount you pay when using GoodRx does not automatically count towards your deductible or getting you out of the donut hole either.
Here are some of the biggest Medicare mistakes to avoid:
Walmart's $4 Prescription Program offers a list of commonly prescribed generic drugs for as low as $4 for a 30-day supply (or $10 for 90 days), requiring no insurance or membership for the basic program, though some newer benefits and discounts integrate with Walmart+. It covers generics for conditions like cholesterol, blood pressure, and diabetes, but excludes antibiotics, antihistamines, and steroids, with some prices varying by state.
Medicare does not cover:
There's no single "best" plan, but Plan G is the most popular and comprehensive for new enrollees (eligible for Medicare after Jan 1, 2020), covering nearly everything except the Part B deductible; Plan F is the most comprehensive but only for pre-2020 enrollees, while Plan N offers lower premiums for some copays. Top providers often cited for Plan G include UnitedHealthcare/AARP, Anthem, and State Farm, but the best choice depends on your budget, specific needs, and local rates.
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.
The $2,000 prescription cap for seniors is a real benefit from the Inflation Reduction Act (IRA) that began in 2025, setting a limit on out-of-pocket prescription drug costs for Medicare Part D enrollees, meaning beneficiaries pay no more than $2,000 annually for covered medications, with the cap increasing to $2,100 in 2026. This major change eliminates the "donut hole" and provides significant savings for seniors with high drug costs, allowing costs to be spread out monthly.
You are entitled to free prescriptions if you or your partner receive the following benefits: