Donut Hole: What It Is and How It Affects Your Prescription Costs

When you’re on Medicare Part D, a federal program that helps pay for prescription drugs. Also known as prescription drug coverage, it’s meant to make meds affordable—but it has a big catch called the donut hole, a coverage gap where you pay full price for drugs after spending a certain amount. This isn’t a trick or a glitch. It’s built into the system. And if you take regular medications, especially for chronic conditions like diabetes, high blood pressure, or arthritis, you’ll likely hit it.

The donut hole kicks in after you and your plan have spent a set amount on covered drugs in a year. In 2025, that’s $5,030. Once you cross that line, you’re on your own until you hit $8,000 in out-of-pocket spending. During that gap, you pay 25% of the cost for brand-name drugs and 41% for generics—no discounts, no help from your plan. It’s not a complete blackout, but it’s enough to make people skip doses, split pills, or delay refills. That’s dangerous. And it’s why so many people end up in the ER because they couldn’t afford their meds.

There’s a reason this gap still exists: drug companies and insurers negotiated it that way. But things have changed. The Inflation Reduction Act started closing the donut hole early, and now you get more help than you used to. Still, you’re paying more than you should. The real solution isn’t waiting for policy changes—it’s knowing your options now. You can switch plans during open enrollment, use manufacturer coupons, check for patient assistance programs, or ask your pharmacist about generic alternatives. Some drugs have 10x cheaper versions that work just as well. And if you’re on insulin, there’s now a $35 monthly cap—something that didn’t exist five years ago.

What you’ll find below are real, practical guides on how to handle the donut hole without sacrificing your health. We’ve pulled together posts on Medicare Part D, how generic substitution can save you hundreds, how to access medication cost assistance programs, and how to read your plan’s formulary so you don’t get blindsided. These aren’t theory pieces. They’re tools you can use this week to lower your bill. Whether you’re helping a parent, managing your own prescriptions, or just trying to understand why your pharmacy bill jumped, this collection gives you the facts without the fluff.