What Happened to the Medicare Donut Hole? In Plain Words

What the donut hole was

“Donut hole” was a nickname, not an official Medicare name.

Older web pages used the nickname for a stage in the middle of the drug coverage year.

Many older pages are still online.

Some of them still describe that middle stage as if it were part of drug coverage today.

That is why this page uses only Medicare’s current official guide.

What Medicare’s current guide lists instead

Medicare’s official booklet is called “Your Guide to Medicare Drug Coverage.”

The booklet says this, in its own words:

“Generally, all Medicare drug plans and Medicare Advantage Plans with drug coverage have 3 stages.”

The 3 stages are:

• Stage 1: the deductible stage.
• Stage 2: the initial coverage stage. Initial coverage means the main part of the year, after the deductible.
• Stage 3: the catastrophic coverage stage. Catastrophic coverage is the last stage. It is explained below.

There is no fourth stage in the list.

There is no gap stage in the list.

The booklet does not use the words “donut hole” at all.

Stage 1: the deductible

A deductible is an amount you must pay out of pocket each year before your plan pays its share.

That is Medicare’s own definition, in plain words.

Medicare’s guide gives these facts about the deductible:

• Deductibles vary between Medicare drug plans.
• The maximum deductible for drug plans is $615 in 2026.
• Some Medicare drug plans do not have a deductible.
• In some plans, certain drugs are covered before you meet your deductible.

Stage 2: initial coverage, and the $2,100 limit for 2026

Medicare’s guide describes this stage in its own words.

After you meet your deductible, if your plan has one, you pay 25 percent of the cost for your generic and brand-name drugs.

You pay that share until your out-of-pocket spending on covered Medicare Part D drugs reaches $2,100 in 2026.

Some payments made on your behalf also count toward that $2,100.

One example the guide names is payments made through the Extra Help program.

Extra Help is a Medicare program that helps some people pay drug coverage costs.

Then, the guide says, you automatically get catastrophic coverage.

The word “automatically” is Medicare’s word.

No extra step is described in the guide.

Stage 3: catastrophic coverage

Medicare’s guide says this, in its own words:

“You won’t have to pay out of pocket for covered Part D drugs for the rest of the calendar year.”

In plain words: the $2,100 figure for 2026 is a limit, also called a cap.

A cap is a top amount.

Medicare’s payment option page uses the same figure.

It calls $2,100 in 2026 “the out-of-pocket maximum for prescription drugs that are covered by your plan.”

What you pay still depends on your plan

Medicare’s “What does Medicare cost?” page says drug coverage costs include more than the stages.

The guide lists these costs:

• A monthly premium. Premium means the monthly fee for the plan.
• A yearly deductible.
• Copayments or coinsurance. A copayment is a set amount you pay for a drug. Coinsurance is a percent of the cost that you pay.

Medicare’s cost page adds these facts:

• Monthly premiums vary based on which plan you join.
• The premium amount can change each year.
• You may also have to pay an extra amount each month based on your income.
• Most plans charge a deductible, an amount you pay before the plan starts to pay, for prescriptions you fill.
• Your actual costs vary depending on the medicines you take.
• Your actual costs also vary depending on whether the medicines are on your plan’s list of covered drugs.
• Your actual costs also vary depending on which pharmacy you use.

The list of drugs a plan covers is called a formulary.

That is Medicare’s word for the plan’s drug list.

One way to spread the cost across the year

Medicare offers a payment option called the Medicare Prescription Payment Plan.

Medicare’s guide describes it this way:

• It works with your current drug coverage.
• It spreads your out-of-pocket drug costs across the calendar year, from January to December.
• It might help you manage your expenses.
• It does not save you money.
• It does not lower your drug costs.
• All plans offer this payment option.
• Taking part is voluntary. Voluntary means it is your choice.
• It does not cost anything to take part.

If you select this payment option, you still pay your plan premium each month, if you have one.

You get a bill from your health or drug plan for your prescription drugs.

You get that bill instead of paying the pharmacy.

Medicare’s payment option page adds one more fact.

In a single calendar year, you will never pay more than the out-of-pocket maximum for prescription drugs that are covered by your plan.

That maximum is $2,100 in 2026.

Medicare’s payment option page also says to contact your health or drug plan if you have specific questions about how the Medicare Prescription Payment Plan works.

Two ways to get drug coverage

Medicare’s guide lists 2 ways to get drug coverage:

• Add Medicare drug coverage (Part D) to Original Medicare. Original Medicare has 2 parts: Part A (Hospital Insurance) and Part B (Medical Insurance).
• Get drug coverage as part of a Medicare Advantage Plan or other Medicare health plan. With these plans, you get Part A, Part B, and drug coverage through the plan.

Medicare Advantage Plans that offer prescription drug coverage are sometimes called “MA-PDs.”

That short name is spelled out here because Medicare’s guide uses it.

Where to check the facts for one person

This page gives general information only.

It does not give any one person’s costs.

Medicare’s own pages name these routes:

• Your plan. Contact your health or drug plan for specific questions about your own coverage and costs.
• Medicare. Call 1-800-MEDICARE (1-800-633-4227). TTY users can call 1-877-486-2048. TTY means a text telephone service for people who are deaf or hard of hearing. Medicare’s guide says this line is open 24 hours a day, including weekends.
• Your State Health Insurance Assistance Program. The short name is SHIP. Medicare’s guide says SHIPs are state programs that give free local health insurance counseling to people with Medicare and their families. The guide says to visit shiphelp.org to get the phone number for your SHIP.

If an older page tells you that you will enter a donut hole this year, check it against Medicare’s current guide.

The current guide lists 3 stages, and no gap stage.