The Medicare Donut Hole Is Gone: How Medicare Part D Prescription Costs Work in 2026

For years, Medicare beneficiaries worried about entering the “Medicare Donut Hole” — a coverage gap that caused prescription drug costs to suddenly spike mid-year.

 

Here’s the good news for 2026:
The Medicare Donut Hole no longer exists.

 

Recent changes to Medicare Part D have eliminated the coverage gap and replaced it with a simpler structure — including a new annual cap on out-of-pocket prescription drug costs.

If you live in St. Louis, Missouri, and rely on Medicare for your prescriptions, understanding these updates can help you better plan your healthcare budget and avoid unexpected expenses.

 

What Was the Medicare Donut Hole?

 

The “Donut Hole” was the name commonly used for the Medicare Part D coverage gap.

 

In the past, once you and your drug plan spent a certain amount on prescriptions, you entered a temporary phase where you paid a larger share of your medication costs. Although the gap was gradually reduced over time, it still created confusion and financial stress for many beneficiaries.

 

As of recent Medicare reforms, that coverage gap has officially been eliminated.

 

How Medicare Part D Works in 2026

 

Medicare Part D has been redesigned to make prescription drug costs more predictable and affordable.

Here’s how coverage works in 2026:

 

1. Annual Deductible

Some Part D plans have a deductible that you must meet before coverage begins. Not all medications may be subject to the deductible, depending on your plan.

 

2. Initial Coverage Phase

After meeting your deductible (if applicable), you pay copays or coinsurance based on your plan’s formulary.

There is no longer a separate “Donut Hole” phase.

 

3. Annual Out-of-Pocket Cap

The most important change:
In 2026, Medicare Part D includes a $2,100 annual cap on out-of-pocket prescription drug costs .

Once you personally spend $2,100 on covered prescription medications during the year:

• You will not pay additional out-of-pocket costs for covered Part D drugs for the remainder of the year.
• Your plan and manufacturers cover the remaining costs.

This new cap provides meaningful financial protection, especially for individuals taking high-cost brand-name medications.

 

New in 2026: The Medicare Prescription Payment Plan

 

Another important update allows beneficiaries to spread out prescription drug costs over the calendar year.

Instead of paying large pharmacy bills early in the year, you may choose to:

• Enroll in the Medicare Prescription Payment Plan
• Divide your out-of-pocket costs into monthly payments

This option does not reduce your total drug costs, but it can help make expenses more manageable and predictable.

 

What This Means for Medicare Beneficiaries in St. Louis

 

While the Donut Hole is gone, choosing the right Medicare Part D plan is still critical.

Plans vary in:

• Monthly premiums
• Formularies (which drugs are covered)
• Pharmacy networks
• Deductibles
• Copays and coinsurance

Even with the new $2,100 cap, the wrong plan can cost you more than necessary before you reach that limit.

That’s why reviewing your coverage every year during Medicare Open Enrollment is essential.

 

How to Lower Your Prescription Drug Costs in 2026

 

Even without the Donut Hole, smart planning matters. Here are several strategies:

• Compare Part D plans annually
• Confirm your medications are on the plan’s formulary
• Ask your doctor about generic alternatives
• Use preferred pharmacies for lower copays
• Consider enrolling in the Medicare Prescription Payment Plan
• Check whether you qualify for Extra Help (Low-Income Subsidy)

Small adjustments can result in significant savings.

 

Why Work with a Local Medicare Consultant in St. Louis, Missouri?

 

Medicare rules change frequently — and plan options differ by region.

Working with a local Medicare consultant means:

• Personalized plan comparisons based on your prescriptions
• Understanding which plans work best in the St. Louis area
• Help navigating new Medicare Part D changes
• Ongoing support when your needs change

Having an experienced advisor ensures you’re not relying on outdated information — especially when major updates like the elimination of the Donut Hole take place.

 

Final Thoughts

The Medicare Donut Hole may be a thing of the past, but understanding how Medicare Part D works in 2026 is more important than ever.

 

With the new $2,100 out-of-pocket cap and updated plan structure, beneficiaries now have stronger financial protection — but choosing the right plan still makes a big difference.

 

If you’re in St. Louis and want clear, personalized guidance, Show Me 65 is here to help. From Medicare Parts A & B to Prescription Drug Plans, our team makes Medicare simple so you can feel confident about your healthcare decisions.

 

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