Quick Answer: The Donut Hole No Longer Exists
The Medicare Part D “donut hole” — the coverage gap where beneficiaries used to pay significantly more for prescriptions mid-year — was eliminated starting in 2025 under the Inflation Reduction Act. In its place, 2026 has a single hard cap: once you spend $2,100 out of pocket on covered Part D drugs, your plan pays 100% of your covered drug costs for the rest of the year. There’s no more “falling into the gap” and paying more before catastrophic coverage kicks in.
What the Part D “Coverage Gap” Used to Mean
For years, Medicare Part D had a much-discussed coverage gap — the donut hole — where beneficiaries who’d spent enough on prescriptions in a year would suddenly see their share of drug costs jump, often to 25% or more of the drug’s price, until they spent enough to reach catastrophic coverage. It was confusing, and it caught a lot of people off guard mid-year when a refill suddenly cost far more than the month before. The Inflation Reduction Act restructured Part D’s cost-sharing phases, and for 2026 the practical effect is a hard annual out-of-pocket cap instead.
The 2026 Part D Structure
In 2026, the standard Part D deductible is $615 (some plans have a lower or $0 deductible). After you meet the deductible, you move into the initial coverage phase, sharing costs with your plan according to its formulary tiers. Once your total out-of-pocket drug spending for the year reaches $2,100, you move into the catastrophic coverage phase — and from that point forward, you pay $0 for covered Part D drugs for the rest of the calendar year. That’s it: three phases, no separate gap tier with higher cost-sharing. The $2,100 cap is the single most important Part D number to know for 2026, because it means your maximum drug spending for the year is capped regardless of how many prescriptions you fill.
Why This Matters for Your Wallet
Before this change, some Medicare beneficiaries with expensive medications could face thousands of dollars in unpredictable costs during the gap phase. Now, your maximum out-of-pocket exposure for covered drugs is capped and predictable. If you take one or more brand-name medications, this is one of the most beneficiary-friendly changes to Part D in years.
Why This Still Catches People Off Guard
Even with the cap in place, a few things trip people up:
- Formulary tiers matter. Two plans can have very different costs for the exact same drug depending on which tier it sits on. A plan that looks cheap on premium alone can be expensive if your specific medications are on a high tier.
- Not all pharmacies are equal. Preferred pharmacy networks can mean a meaningfully lower copay than an out-of-network pharmacy for the same drug, same plan.
- Mid-year plan changes to formularies are rare but possible. Reviewing your plan each year during AEP — rather than assuming this year’s plan is still the cheapest option for your specific drug list — is the best way to avoid surprises.
How to Check Where You Stand
Your Part D plan sends an Explanation of Benefits (EOB) after each fill showing your running total toward the deductible and the $2,100 cap. If you’re not sure where you stand for the year, your plan’s member portal or customer service line can tell you exactly how much you’ve spent so far.
Is the Medicare donut hole completely gone in 2026?
Yes. The coverage gap phase was eliminated starting in plan year 2025, and it does not exist in the 2026 Part D structure. Beneficiaries now move from the initial coverage phase directly into catastrophic coverage once they hit the $2,100 out-of-pocket cap.
What is the Medicare Part D out-of-pocket cap for 2026?
The 2026 out-of-pocket cap for covered Part D drugs is $2,100. Once you reach that amount in a calendar year, your plan covers 100% of your covered drug costs for the remainder of the year.
Do all Part D plans have the same $2,100 cap?
Yes, the $2,100 out-of-pocket cap is a standard Part D feature set by CMS and applies across all Part D plans, whether standalone or bundled into a Medicare Advantage plan. What can vary by plan is the deductible, monthly premium, and formulary tier pricing before you reach that cap.
Have questions? Schedule a free review with Kayla Price, a licensed insurance agent at Price Services Group. Call 866-648-1578 or visit priceservicesgroup.com/schedule.
For a broader refresher on how Part D drug coverage works, LearnMedicare.org’s free course covers Part D alongside the rest of Medicare basics.
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