Say goodbye to the Medicare Part D Donut Hole

If you’re new to Medicare, or are looking for a new Medicare Advantage plan, you should be aware that there are some recent changes to the Medicare coverage gap, also known as the donut hole.  Starting in January 2025 the Medicare Part D Donut Hole is being eliminated. Removing it will make prescription drug coverage more consistent, manageable, and affordable. The maximum out-of-pocket costs that a member will pay for medications in 2025 will be $2,000. Elimination of the coverage cap could save the average Medicare Advantage enrollee $1,000 annually on their Part D prescription costs. To understand how your Medicare Part D coverage has changed, read through the following answers to common questions:

What is Medicare Part D?

Medicare Part D is the coverage option that helps you pay for prescriptions. Before you pick a plan, you’ll first want to make sure your prescriptions are covered. A Licensed Medicare Advisor can help you pick a Medicare Part D plan that includes the right Medicare prescription coverage you need.

The Medicare Part D donut hole is being eliminated

The Medicare Part D Donut Hole occurred after members reached their initial Medicare Part D coverage limit. At that point, members paid a certain percentage of the cost of their drugs rather than a copay.  Once your out-of-pocket spending reached the predetermined level (you would enter the catastrophic coverage phase) you’d only pay a low copayment or coinsurance for prescription drugs. This was especially beneficial for members with high-cost drugs.

What’s changing for Medicare Part D in 2025?

2025 brings changes to the out-of-pocket costs that you'll pay for your prescription medications. Here are some of the takeaways:

1. The Donut Hole coverage gap will be eliminated.
2. This means you’ll no longer have to pay a copayment or coinsurance for drugs once you reach the catastrophic coverage phase.
3. This change will cap annual Part D out-of-pocket costs to $2,000 in 2025.
4. You’ll have a lower maximum amount to pay for covered medications, which could save you more than $1,000 a year.

What else do I need to know?

The closing of the Medicare Part D Donut Hole will help make drug coverage more manageable and affordable. But to keep prescription costs down, Highmark recommends taking these steps:

• Ask your physician or pharmacist if there is a generic drug available at a lower cost.
• Check to see which pharmacies your insurance covers. Prescriptions filled by a preferred in-network pharmacy tend to cost less.