Changes to Medicare Prescription Coverage in 2025: part # 2

A change that will make many seniors happy…the coverage gap — or “donut hole” — will finally close!

The original Medicare Part D benefit had a coverage gap (also called the “donut hole”) where enrollees were responsible for 100 percent of their prescription drug costs. This cost-sharing amount was eventually lowered to 25 percent. Even still, many enrollees who reached the coverage gap faced higher out-of-pocket costs while they were in that part of the benefit.

In 2024, Part D enrollees entered the coverage gap after their total prescription drug spending reached $5,030. Once they hit that amount, they were responsible for up to 25 percent of the cost of their medication until their out-of-pocket expenses reached $8,000 and pushed them into catastrophic coverage.

The prescription drug law that created the new $2,000 out-of-pocket spending cap also eliminates the coverage gap, simplifying coverage for enrollees. Beginning Jan. 1, 2025 a senior will have the same cost-sharing from the time they meet their Part D plan deductible until they reach the new $2,000 out-of-pocket cap, at which point, they’ll be off the hook for any additional out-of-pocket expenses for their covered prescription drugs for the remainder of the calendar year.

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