By the end of 2024, the Medicare Part D coverage gap - known as the donut hole - will disappear forever. But until December 31, 2024, millions of seniors still face it. If you’re taking expensive medications and hit that gap, your out-of-pocket costs can spike overnight. You’re not alone. In 2022, nearly 1 in 4 Medicare Part D enrollees reached the coverage gap. For some, that meant paying $1,000 or more a month just to keep taking their drugs.

What the Donut Hole Actually Means in 2024

The donut hole isn’t a mystery. It’s a phase in your Medicare drug plan where you pay more for prescriptions after you and your plan have spent a certain amount on covered drugs. In 2024, that threshold is $5,030 in total drug costs. Once you hit that number, you enter the coverage gap. You don’t lose coverage - you just pay more.

Here’s how it breaks down:

• During the donut hole, you pay 25% of the cost for both brand-name and generic drugs.
• For brand-name drugs, the manufacturer gives you a 70% discount, but that discount doesn’t count toward getting you out of the gap.
• Your plan pays 5% of the brand-name drug cost.
• For generics, your plan pays 75%, and you pay 25% - no manufacturer discount applies.

The real kicker? You don’t get out of the donut hole until your total out-of-pocket spending hits $8,000. That includes your 25%, your plan’s share, and the manufacturer discount. But here’s the catch: if you’re on a brand-name drug like Humira or Repatha, you’ll hit that $8,000 mark faster because the manufacturer discount counts toward it. If you’re on generics, you’ll spend way more out of pocket before you reach catastrophic coverage.

Why the Donut Hole Hits Hard - Real Stories

People don’t just talk about the donut hole - they live it.

A Reddit user shared how their parent with rheumatoid arthritis was paying $1,200 a month for Humira during the gap. They had to skip doses. Another person on a Medicare forum split pills to make their medication last longer. A 74-year-old woman with high cholesterol had to choose between her statin and her insulin because she couldn’t afford both after entering the gap.

These aren’t rare cases. In a survey of 1,247 Medicare beneficiaries who hit the donut hole, 68% said they changed how they took their meds. One in three skipped doses. One in five cut pills in half. That’s not just cost-saving - it’s dangerous.

How to Lower Your Costs Before the Donut Hole Hits

You don’t have to wait until you’re in the gap to act. Start now.

Check your plan’s formulary. Not all drugs are treated the same. Tier 1 drugs (usually generics) cost less. Tier 3 or 4 (brand-name or specialty drugs) cost more. If your drug is on Tier 4, you’re already on the path to the gap. Ask your pharmacist: “Is there a similar drug on a lower tier?”

Switch to generics. If your doctor says it’s safe, switching from a brand-name drug to its generic version can save you $1,200 to $2,500 a year. For example, switching from brand-name Lipitor to atorvastatin can drop your monthly cost from $150 to under $10. Many doctors assume patients know this - they don’t. Ask.

Use 90-day supplies. Many plans offer lower copays for 90-day mail-order prescriptions. You might pay $25 for a 90-day supply instead of $45 for three 30-day fills. That’s 20% savings. And if you’re approaching the gap, getting your 90-day supply early can help you stretch your spending across the year.

Apply for Extra Help. If your income is below $21,590 (individual) or $29,170 (couple) in 2024, you may qualify for the Low-Income Subsidy. It covers your deductible, reduces your copays, and eliminates the donut hole entirely. Over 12 million people qualified in 2023 - but only about half applied. Don’t assume you don’t qualify. Apply at SSA.gov or call 1-800-MEDICARE.

Use Manufacturer Discounts - They’re Real

Big drug companies offer patient assistance programs. These aren’t ads. They’re real savings.

For example, Amgen’s program for Repatha (a cholesterol drug) reduced one woman’s monthly cost from $560 to $5 during the donut hole. Eli Lilly’s program for Humira cut costs by 85% for eligible users. These programs often require paperwork - a doctor’s note, proof of income, a prescription - but they’re free to apply for.

Go to the drugmaker’s website and search for “patient assistance program.” Or use NeedyMeds.org or RxAssist.org. Both are nonprofit and free. You can even call the manufacturer directly. Many have reps who walk you through the process.

Use the Medicare Plan Finder - Before It’s Too Late

Your plan changes every year. So should your strategy.

The Medicare Plan Finder tool lets you enter your exact drugs, dosages, and pharmacy. It shows you which plan will cost you the least for the year - including how much you’ll pay if you hit the donut hole. In 2023, 14.3 million people used it. Those who optimized their plan saved an average of $1,047.

Don’t wait until open enrollment. Run your drugs through the tool now. If your current plan puts you at high risk for the gap, you might switch to a different plan during the Annual Enrollment Period (October 15-December 7). Some plans have lower initial coverage limits - meaning you hit the gap later. Others have better discounts on your specific drugs.

Spread Out Your Purchases - Strategically

If you’re close to the $5,030 threshold and still have meds to buy, you can delay entering the gap.

For example: if you have $4,800 in spending so far and need $300 more to hit the gap, don’t refill your prescription right away. Wait until January. You’ll avoid the gap this year and start fresh in 2025.

But be careful. This only works if your meds aren’t life-critical. If you’re on insulin, blood thinners, or heart meds, don’t delay. Your health comes first. This trick is for non-urgent prescriptions - like allergy meds, osteoporosis drugs, or certain antidepressants.

What’s Changing in 2025 - And Why It Matters

Starting January 1, 2025, the donut hole is gone. Forever.

The new rule: you pay no more than $2,000 out of pocket for all your Part D drugs in a year. After that, your plan covers 100% of costs. No more 25% coinsurance. No more $8,000 threshold. No more confusion.

Manufacturers will still give discounts - but now they’ll pay 10% during initial coverage and 20% after you hit the $2,000 cap. Your plan will cover the rest. This is a huge win.

But here’s the catch: premiums might rise slightly for some. The Medicare Payment Advisory Commission predicts average Part D premiums could go up 4.2% by 2026. That’s because manufacturers won’t be helping as much during the initial coverage phase anymore. But for most people - especially those on expensive drugs - the $2,000 cap will save hundreds or thousands.

What to Do Right Now

You have less than a month before the donut hole disappears. Here’s your checklist:

1. Log into Medicare.gov and run your drugs through the Plan Finder tool.
2. Call your pharmacy and ask: “What’s my total drug spending so far this year?”
3. If you’re close to $5,030, ask your doctor: “Can I switch to a generic?”
4. Check if your drugmaker has a patient assistance program - even if you think you earn too much.
5. Apply for Extra Help if your income is under $21,590 (individual) or $29,170 (couple).
6. Review your 2024 Annual Notice of Change - mailed in September - to see how your plan is changing for 2025.

The donut hole has been a financial trap for years. But in 2025, it’s over. The real challenge now is making sure you don’t get caught in the last year of it. Don’t wait until you’re paying $1,000 a month for a single pill. Act now - before the gap closes for good.