What are the 4 stages for the Medicare donut hole?
Asked by: Dr. Elta Dicki V | Last update: October 12, 2025Score: 4.8/5 (43 votes)
- Stage 1—deductible stage. ...
- Stage 2—initial coverage stage. ...
- Stage 3—Medicare Part D coverage gap. ...
- Stage 4—catastrophic coverage.
How do you know when you are in the Medicare donut hole?
Prior to new Part D rules that took effect January 1, 2025, you would enter the donut hole when your total drug costs—including what you and your plan have paid for your drugs—reached a certain limit beyond your initial coverage period threshold.
What are the four phases of Part D coverage?
- Deductible phase. This is the first phase. ...
- Initial coverage phase. If your plan has no deductible, you'll start in the initial coverage phase. ...
- Coverage gap phase. ...
- Catastrophic phase.
How much do you have to spend to get out of the donut hole?
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. You'd leave the donut hole when your out-of-pocket costs for covered drugs reached $8,000. As of 2025, there's no donut hole.
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.
Part D of Medicare - 2021 Changes and Donut Hole Example
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.
Will a donut hole go away?
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 happens to the Medicare donut hole in 2025?
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?
Is there any insurance that covers the Medicare donut hole? While the federal government has shrunk the coverage gap, currently there aren't any Medicare Part D plans without a donut hole, even those included as part of a Medicare Advantage plan.
Is Medicare Part D really necessary?
You may not need it if you have drug coverage from elsewhere that's “creditable” — meaning Medicare considers it to be of the same or better value than Part D. This coverage could come from an employer or union, retiree benefits, COBRA, Tricare or the Veterans Affairs health program.
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 is the maximum out-of-pocket for Medicare 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?
Yes, the plan design for Medicare Part D prescription medication benefits will eliminate the donut hole beginning January 1, 2025.
Are there any Medicare plans that don't have a donut hole?
There is not a Medicare plan that covers the donut hole. You may wonder if a Medigap could help you avoid donut hole costs. Medigap policies are private Medicare supplement insurance plans that are sold to cover additional costs and some services not traditionally covered by Original Medicare.
What is the Medicare donut hole for 2024?
COMPLETING YOUR JOURNEY THROUGH THE 2024 DONUT HOLE
Deductible Period: You pay the first $545 of actual drug costs before Medicare coverage begins to pay. Coinsurance/Copayment Period: You pay your coinsurance or copayment amount until the actual drug costs reach $5,030.
Why are hospitals refusing Medicare Advantage plans?
Among the most commonly cited reasons are excessive prior authorization denial rates and slow payments from insurers. In 2023, Becker's began reporting on hospitals and health systems nationwide that dropped some or all of their Medicare Advantage contracts.
How do you qualify for $144 back from Medicare?
- Be enrolled Original Medicare (Parts A and B)
- Pay your own Part B premium.
- Live in the service area of a plan that offers a Part B giveback.
How to avoid donut holes in Medicare?
- 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.
Will Medicare Part D have a donut hole in 2025?
As of Jan 1, 2025, the Medicare Part D coverage gap (commonly known as the "donut hole") is gone. This major change, a result of the Inflation Reduction Act, simplifies prescription drug coverage by removing the coverage gap phase and establishing a $2,000 annual cap on out-of-pocket spending for covered drugs.
What is the $2000 limit for Medicare Part D?
Thanks to the Inflation Reduction Act, in 2025 annual out-of-pocket costs will be capped at $2,000 for people with Medicare Part D.
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.
What is the best way to explain the donut hole?
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.
What is the Medicare out-of-pocket maximum for 2025?
Starting in 2025, all Part D and Medicare Advantage plans will have a $2,000 annual cap on out-of-pocket prescription drug costs (this cap was previously $8,000). Once you hit this threshold, your costs for covered prescriptions will be $0 for the rest of the year.