The Medicare Part D coverage gap, often called the "donut hole," used to be a stage where people paid a larger share of their drug costs. That stage ended in 2025. Part D now has three simple ideas to know: a deductible, your share of costs, and a yearly cap.
What happened to the donut hole?
Starting in 2025, the coverage gap phase was eliminated. You move from paying your share of costs straight to the yearly out-of-pocket cap. If you read older articles about the donut hole, that information no longer applies.
Part D costs in 2027
- Yearly deductible: some plans have none. If a plan has a drug deductible, it can be no more than $700 in 2027.
- Your share: after any deductible, you pay copayments or coinsurance. The amount depends on the plan and the drug's tier.
- Out-of-pocket cap: in 2027, your out-of-pocket costs for covered Part D drugs are capped at $2,400. Once you reach it, you pay $0 for covered Part D drugs for the rest of the year.
- Insulin: covered insulin costs no more than $35 for a one-month supply.
Spreading your costs over the year
The Medicare Prescription Payment Plan lets you spread your out-of-pocket drug costs across the calendar year in monthly payments. Every Part D plan offers it. It doesn't lower your costs, and it may not be a good fit if you get Extra Help. If you're in it and stay in the same plan, it renews automatically for 2027.
Help if your income is limited
Extra Help lowers Part D premiums, deductibles and copays for people with limited income and resources. In 2027, people who qualify generally pay no more than $5.80 for each generic drug and $14.40 for each brand-name drug at network pharmacies, and they don't pay a Part D late enrollment penalty.
Review your drug plan every fall
Plans can change their premiums, drug lists and pharmacy networks each year. Open Enrollment for 2027 coverage runs October 15 to December 7, 2026. We can review your drug list against the plans we offer, or you can compare all plans at Medicare.gov/plan-compare.
Source: Medicare & You 2027 (medicare.gov/publications/10050-medicare-and-you.pdf).
