The short answer
No. The Part D coverage gap, the one everybody called the donut hole, was removed from Medicare drug coverage starting January 1, 2025. If you’re reading a page, a mailer, or a chatbot answer that still describes it, that source is out of date. Source: CMS, Final CY 2025 Part D Redesign Program Instructions, 2025.
What replaced it
Medicare drug coverage now has three phases instead of four: a deductible phase, an initial coverage phase, and catastrophic coverage. The part that matters to your wallet is the cap between the second and third. Source: CMS, 2025.
Once what you’ve paid out of pocket for covered Part D drugs reaches $2,100 in 2026, you get catastrophic coverage automatically, and you pay nothing for covered Part D drugs for the rest of that calendar year. In 2025 the cap was $2,000. It resets every January 1. Source: Medicare.gov, Costs for Medicare drug coverage, 2026; CMS, 2025.
That cap is the whole story. There’s no stretch in the middle of the year where you suddenly pay a bigger share, which is exactly what the donut hole used to be.
What counts toward the $2,100
- What you pay for drugs your plan covers: the deductible, copays, and coinsurance.
- Certain payments made on your behalf, for example through the Extra Help program.
Source: Medicare.gov, 2026.
What doesn’t count
- Your monthly premium. You pay that whether you fill a prescription or not, and it never counts toward the cap. Source: Medicare.gov, 2026.
- Drugs your plan doesn’t cover. The cap is for covered Part D drugs. If a drug isn’t on your plan’s list, what you pay for it is outside the cap, which is one more reason the drug list matters when you compare plans.
- Drugs billed under Part B. Drugs you wouldn’t typically give yourself, like infusions and injections at a doctor’s office or hospital outpatient department, are usually Part B, not Part D. For those you generally pay 20% of the Medicare-approved amount after the Part B deductible, and that spending has its own rules. Source: Medicare.gov, Prescription drugs (outpatient), 2026.
If $2,100 all at once is the problem
There’s a payment option called the Medicare Prescription Payment Plan. It works with the drug plan you already have and spreads your out-of-pocket drug costs across the calendar year in monthly amounts instead of at the pharmacy counter. It doesn’t lower your costs or save you money; it changes when you pay them. Every plan offers it, and joining is voluntary, so it isn’t automatic. Source: Medicare.gov, Medicare Prescription Payment Plan, 2026.
Why you’ll keep hearing “donut hole”
The gap existed for almost two decades, so a large share of what’s online about Part D was written before 2025. The same goes for AI chatbots, which learned from those pages. If an answer mentions the coverage gap, four phases, or a $2,000 cap, it’s describing 2025 or earlier. The 2026 number is $2,100, and there’s no gap.
If you use a chatbot to make sense of a plan letter, our guide on using AI to read a Medicare letter covers what to check and what never to paste.
What to do with this during enrollment season
The cap is the same for every Part D plan and every Medicare Advantage plan with drug coverage, so it isn’t something to compare. What differs from plan to plan is whether each of your drugs is covered, which cost tier it sits in, which pharmacies are in network, and the premium and deductible. The Plan Finder on Medicare.gov shows all of that for the plans in your area, and it sells nothing. The Annual Enrollment Period game plan walks through the dates and the order to do it in.