Starting in 2025, the old Medicare Part D “coverage gap” — sometimes called the Donut Hole — no longer exists. Instead of a gap where you and your plan share drug costs differently, 2026 Part D plans now have a hard annual out-of-pocket limit that provides simpler, more predictable prescription drug costs.
2026 Out-of-Pocket Limit
In 2026, once your total out-of-pocket spending for covered Part D drugs reaches $2,100, your plan will pay 100% of your covered prescription drug costs for the remainder of the year — no more gap, no phase of paying coinsurance after that point.
This $2,100 cap includes what you pay for:
- Your deductible (if your plan has one, up to $615 maximum)
- Copayments and coinsurance for covered drugs
…but it does not include: - Your monthly Part D premium
- Costs for drugs not covered by your plan
- Any dispensing fees charged above the negotiated price.
How Part D Works in 2026
In 2026, the process for prescription drug coverage under Part D generally includes:
1. Deductible (if applicable)
Some plans have a deductible — up to $615 in 2026 — before the plan begins to share in drug costs.
2. Initial Coverage
After the deductible, you pay your plan’s standard cost-sharing (like copays or coinsurance) for drugs. All amounts you pay toward your deductible, copays, and coinsurance count toward the $2,100 annual out-of-pocket cap.
3. Out-of-Pocket Cap Reached
Once you’ve paid $2,100 toward covered drugs in 2026, your plan covers 100% of covered prescriptions for the rest of the year.
Because the donut hole no longer exists, you don’t enter a separate coverage gap phase with different rules once total drug costs reach a certain level.
What This Means Compared With the Old “Donut Hole”
In the former Part D design (before 2025), you would enter a coverage gap after total drug costs reached a certain limit and pay different cost shares in that gap before reaching catastrophic coverage. That phase is gone — replaced with the simpler hard cap on your out-of-pocket drug costs.
Brand Name vs. Generic Drugs
While Part D still has usual cost-sharing rules (like copays or coinsurance for brand and generic drugs), the presence or absence of manufacturer discounts no longer drives a separate coverage gap phase. All payments toward your deductible, copays, and coinsurance count toward the $2,100 cap the same way, regardless of drug type.
Why This Matters
This reform — part of the ongoing Part D redesign — ensures that Medicare beneficiaries can never pay more than $2,100 out of pocket on covered prescription drugs in 2026, no matter how many medications they need. That provides peace of mind and helps keep medication costs predictable.
How We Can Help
At Kannonball Insurance Solutions, we’re here to help you navigate these updates and find the Medicare Part D plan that’s right for you — one that keeps your medication costs as affordable as possible. With one phone call, we’ll walk you through plan options and support your decision.