The Part D Coverage Gap: What the Old Donut Hole Became

Many people still ask about the donut hole. They heard the term for years. They fear a stage where drug costs jump with no warning. That old stage is gone. The Part D design now works in a new way. This guide shows what took its place in 2026. It also shows what is set for 2027. Our Paying for Care section holds more guides on drug costs.

What the donut hole was

Part D is the drug cover in Medicare. In past years, it had more stages. A person paid a deductible first. Next, the plan helped pay for drugs. Then the person hit the gap. That gap was called the donut hole.

In the gap, the help from the plan fell. The person paid a larger share of the drug cost. That share came at a hard time. The person had used a lot of drugs that year. Bills rose just when need was high.

Later, the person could move past the gap. At that point, costs fell again. The path through those stages was hard to track. A drug that cost one sum in spring could cost more in fall. The same drug, in the same plan, changed price by stage.

That old path is the past. You do not need a plan to get through a gap stage now. You need to know the new path. The new path has a clear end point. That end point is the yearly cap.

What changed in the Part D design

The gap as a separate stage is gone. What remains is more simple. There is a start. There is a middle where you and the plan share costs. There is an end where your costs for covered drugs stop.

The start is the deductible. Not all plans use the full sum. The max standard deductible is $615 in 2026 (Ledger A9). Your plan papers state the sum your plan uses. Read that sum first when you look at a plan.

The middle is plan cost share. Your plan sets a copay or a coinsurance sum for each drug. You pay that sum when you fill the drug. The plan pays the rest of the cost for that drug.

The end is the cap. Once your out-of-pocket costs for covered drugs reach the cap, you stop paying for covered drugs. The cap is $2,100 in 2026 (Ledger A10). After that point, covered drugs cost $0 for the rest of the year (Ledger A10).

There is no fourth stage past the cap. There is no return to a gap later in the year. Once you reach the cap, the $0 cost holds to year end.

How costs work in 2026, step by step

Step one is the deductible. You pay for covered drugs until you meet the sum your plan sets. That sum can be up to $615 in 2026 (Ledger A9). Some drugs or some plans may work in a distinct way. Your plan papers are the source for your case.

Step two is cost share. You have met the deductible. From then on, you pay the copay or share your plan sets for each drug. The plan pays its part. Each fill adds to the sum you have paid out of pocket.

Step three is the cap. Add up what you paid for covered drugs. When that sum reaches $2,100 in 2026, you have hit the cap (Ledger A10). From that fill on, you pay $0 for covered drugs. That rule holds for the rest of the year (Ledger A10).

Premiums do not set this path. You pay your plan premium each month. That is a cost to hold the plan. The cap in this guide is about what you pay for covered drugs. Keep the two costs apart when you add up your year.

Our guide on how to compare Part D plans by total yearly cost shows how to add premium and drug costs in one sum. That full sum is the best way to pick a plan.

A drug tier is not a price

Plans place drugs on tiers. A tier is a group. The plan puts drugs with like traits in the same group. The tier name or tier number does not state what you pay.

This point causes a lot of mix-ups. Two plans can place the same drug on distinct tiers. One plan can place a drug on a high tier and still set a low cost for it. A drug on a low tier can still cost more than you expect.

The tier does not decide the price. The plan papers and the pharmacy price decide what you pay. Read the copay or share the plan lists for that drug. Check the price at the pharmacy you will use. Those two checks give you the real cost.

Do not pick a plan by tier alone. Do not drop a plan by tier alone. Look at the drug list. Look at the cost for each drug you take. Look at the pharmacy rules. Then add up the full year cost.

This guide states no plan copay sum for any drug. No plan sum would be true for all plans. Your plan is the only source for your sum.

Insulin and vaccines under the new rules

Insulin has its own rule. It does not follow the same path as other drugs. For a covered insulin product, you pay at most $35 for each month's supply of that product (Ledger A12). No deductible applies to that cost (Ledger A12).

Note how the rule is worded. It is per product. It is per month's supply. If you use more than one insulin product, the rule applies to each one. Your plan papers list which insulin products the plan covers.

Vaccines have a rule too. Adult vaccines named by the ACIP cost $0 (Ledger A12). ACIP is the group that names the vaccines for this rule. If a vaccine is on that list and your plan covers it under Part D, the cost to you is $0.

These two rules help some people a lot. They do not change the cap for other drugs. Your other covered drugs still count on the path to the $2,100 cap in 2026 (Ledger A10).

What is set for 2027

The sums change next year. For 2027, the deductible is set at $700 (Ledger A17). The cap is set at $2,400 for 2027 (Ledger A18). Read those sums with care. They are not yet in effect.

Do not use the 2027 sums for a 2026 fill. Do not use the 2026 sums when you plan for next year. Each year has its own sums. The year of the fill decides which sums apply.

Our guide on Part D in 2027 covers the 2027 sums and the insulin rule for that year. Read it when you look at plans for next year. Plans for 2027 will show the new sums in their own papers.

A late charge sits apart from these sums. Our guide on the Part D late enrollment penalty shows how that charge is set and how long it lasts. It is not part of the deductible or the cap.

Who pays for what

• You pay the deductible first, up to the sum your plan sets. That sum can be up to $615 in 2026 (Ledger A9).
• You pay the cost share your plan sets for covered drugs. You pay it until your out-of-pocket costs reach $2,100 in 2026 (Ledger A10).
• Your Part D plan pays its share of the cost for covered drugs in the cost share stage. The plan also pays the cost of covered drugs once you reach the cap and your cost is $0.
• Medicare sets the Part D rules. It sets the max standard deductible and the yearly cap. It also sets the insulin and vaccine rules in this guide.
• You pay at most $35 for each month's supply of each covered insulin product, with no deductible (Ledger A12). You pay $0 for adult vaccines named by the ACIP (Ledger A12).
• Medicaid or other help may pay some drug costs for people who qualify. Those rules are set by the program that gives the help.
• Private pay covers a drug the plan does not cover. A drug that is not covered does not count the same way as a covered drug. Check cover with your plan before you fill it.

Sample situation

Rosa takes three covered drugs each month. Her plan uses the max standard deductible. She pays for her drugs at the start of the year. She meets the $615 deductible in 2026 (Ledger A9). Next, she pays the cost share her plan sets for each fill. She keeps each receipt. She adds up what she has paid out of pocket for covered drugs. By late summer, her sum reaches $2,100 in 2026 (Ledger A10). From that point, she pays $0 for covered drugs for the rest of the year (Ledger A10). Rosa also uses one covered insulin product. For that product, she paid at most $35 for each month's supply, and no deductible applied to it (Ledger A12). She does not use the 2027 sums for this year. She knows the $700 deductible (Ledger A17) and the $2,400 cap (Ledger A18) are set for 2027 and are not yet in effect. At year end, she looks at next year's plan papers with the new sums in mind.

What to check for your own drugs

The donut hole name will stick in talk for a while. The stage it named is gone. What counts now is the path in front of you: a deductible, a cost share, and a firm cap. Know those three sums for your year. Check the real price of each drug you take. Then the year holds no gap to dread.

• List each drug you take. Write the dose and how often you take it.
• Check that your plan covers each drug. A drug that is not covered needs a new check.
• Read the deductible sum in your plan papers. Do not assume it is the max sum.
• Find the copay or share for each drug. Do not judge cost by tier alone.
• Check the price at the pharmacy you plan to use.
• Track what you pay for covered drugs. Watch your sum as it nears the $2,100 cap in 2026 (Ledger A10).
• If you use insulin, check the $35 rule for each product you use (Ledger A12).
• Keep the year straight. Use 2026 sums for 2026 and 2027 sums for 2027.