How does the donut hole work in 2023?
Asked by: Dr. Elissa Becker | Last update: September 26, 2025Score: 4.7/5 (33 votes)
Will Medicare ever get rid of the donut hole?
In 2025, the Medicare Part D coverage gap, also known as the “donut hole,” will be eliminated under the Inflation Reduction Act (IRA). Part D plan members will also enjoy the security of an annual maximum out-of-pocket cost for prescription drugs.
What will the medicare donut hole be for 2024?
2024 was the last year of the donut hole. In 2024, you would enter the donut hole once you and your Part D plan together spent $5,030 on covered drugs.
How does the donut hole work?
Medicare drug plans previously had a coverage gap (also called the "donut hole"). The donut hole was a temporary limit on what the drug plan would cover for drugs. Now all Medicare plans include a $2,000 cap on what you pay out-of-pocket for prescription drugs covered by your plan.
Can I use GoodRx if I'm in the donut hole?
Key takeaways:
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.
Medicare Donut Hole Explained Simply
Why can't you use GoodRx with Medicare?
However, GoodRx cannot be combined with your insurance or any federal or state-funded program such as Medicare or Medicaid. GoodRx is not insurance. If you choose to use a GoodRx coupon or your GoodRx Gold membership, it's important to ask the pharmacist not to run your prescription through your insurance or Medicare.
How long do you stay in the donut hole with Medicare?
Generally, you stay in the donut hole until you pay the set limit that's determined by Medicare each year. In 2024, you enter the donut hole once you and your plan have spent $5,030 on covered drugs, and you remain in the coverage gap until your out-of-pocket costs reach $8,000.
Is there a way to avoid the donut hole?
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.
Who pays for drugs in the donut hole?
Just like in the initial coverage period, when you entered the donut hole, you would be responsible for paying 25% of the costs of your medications.
What is the donut hole in social security?
Earnings above this threshold are not taxed for Social Security. The proposed reform suggests reinstating the payroll tax on incomes exceeding $400,000, creating a gap — or “donut hole” — between the current cap and $400,000 where earnings remain untaxed.
What happens to the donut hole in 2025?
Starting on January 1, 2025, the donut hole will be eliminated. And there will be a Part D $2,000 out-of-pocket spending cap, after which enrollees won't pay anything for covered medications for the rest of the year.
How to get out of Medicare donut hole?
- Lower the costs of your prescription medications by choosing a Part D plan with a formulary that includes your medications.
- Shop around to see if you can find a pharmacy that offers your medications at a lower cost.
What is the new Medicare rule for 2025?
Medicare Part D cap of $2,000
Beginning January 1, 2025, people with Part D plans through traditional Medicare and Medicare Advantage plans with prescription drug coverage won't pay more than $2,000 over the calendar year in out-of-pocket costs for their prescription medications.
What is the maximum out-of-pocket for Part D in 2024?
Whether you're taking only brand-name drugs or a mix of brand-name and generic drugs, most people who reach the catastrophic coverage phase in 2024 will pay between $3,300 and $3,800 in out-of-pocket costs. In 2024, Mr. Alvarez takes $200,000 in Medicare Part D covered brand-name drugs.
Is Medicare getting rid of the donut hole?
There will no longer be a Medicare Part D donut hole as of 2025. This is a result of the Medicare Part D changes that have been made under the Inflation Reduction Act.
How much will Medicare cost in 2025 for seniors?
The standard monthly premium for Medicare Part B enrollees will be $185.00 for 2025, an increase of $10.30 from $174.70 in 2024. The annual deductible for all Medicare Part B beneficiaries will be $257 in 2025, an increase of $17 from the annual deductible of $240 in 2024.
What happens when you fall into the donut hole?
However, when the plan has paid up to a specified limit, the person has reached the donut hole. Once they reach this point, a person has to start paying for their medications again until they reach another specified amount. After this, their plan takes over payment once again.
Does GoodRx count towards the donut hole?
Avoid falling into the Medicare donut hole too soon
You can use your Medicare plan for your more expensive brand drugs, and use GoodRx to purchase your less expensive generic medications. The cost of drugs purchased under GoodRx will not count against your coverage limit - thus keeping you out of the donut hole longer.
Is the donut hole going away in 2024?
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").
Is there any insurance that covers the donut hole for Medicare Part B?
No. There is no insurance that can help you cover costs in the donut hole. It's important to note that some Medigap or Medicare supplement plans cover deductibles, coinsurance, and copayments for Medicare Part A and Part B only.
What happens to the Medicare donut hole in 2025?
As in 2024, there is no beneficiary cost sharing above the annual OOP threshold in 2025. The coverage gap phase (also known as the “donut hole”) will be eliminated, which will result in standard Part D coverage consisting of a three-phase benefit: a deductible phase, an initial coverage phase, and a catastrophic phase.
What kind of financial assistance does a consumer receive who qualifies for a low-income subsidy?
Medicare's Part D Low Income Subsidy (also called LIS, or "Extra Help") helps enrollees pay for their prescription drug costs. People with incomes of up to 150% of the Federal Poverty Level (FPL) are eligible for LIS/Extra Help. Learn how the LIS/Extra Help program works, who can get this benefit, and how to enroll.
What does the Medicare Part D cost?
Medicare Part D premiums range from $0 to $190.80 per month in 2025 for stand-alone plans. Additional charges apply if you enroll late, have an extended gap in drug coverage or have a high taxable income.