The Medicare donut hole (coverage gap) was eliminated in 2024. Starting in 2025, there is a $2,000 out-of-pocket cap on Part D drug costs. Once you reach $2,000 in out-of-pocket drug costs, you enter catastrophic coverage and pay $0 for covered drugs for the rest of the year.
Key Points
- The Medicare donut hole was eliminated in 2024
- 2025-2026: $2,000 out-of-pocket cap on Part D drug costs
- After $2,000 OOP: catastrophic coverage — $0 for covered drugs
- The $2,000 cap is a major improvement for people with high drug costs
- Extra Help (Low Income Subsidy) may reduce costs further