By the end of 2024, if you're on Medicare Part D and take regular prescriptions, you might hit something called the donut hole. It’s not a hole you can see - it’s a gap in your drug coverage that suddenly makes your pills way more expensive. But here’s the good news: starting January 1, 2025, the donut hole is gone for good. The $2,000 annual out-of-pocket cap is now law. Still, if you’re reading this in late 2024 or early 2025, you’re likely still in the old system - and you need to know how to get through it without breaking the bank.
What the Donut Hole Actually Does to Your Bills
In 2024, your Medicare Part D coverage works in four stages. First, you pay the deductible (up to $590). Then, you enter the initial coverage phase, where your plan pays most of your drug costs. But once your total drug spending - including what you and your plan paid - hits $5,030, you hit the coverage gap. That’s the donut hole. Here’s where it gets tricky: you’re still responsible for 25% of the cost for both brand-name and generic drugs. Sounds manageable, right? But that 25% isn’t the full story. For brand-name drugs, the drugmaker gives you a 70% discount, and your plan pays 5%. That 70% discount counts toward getting you out of the gap. But for generics? No discount. You pay 25% of the full price. So if you’re taking a $1,200-a-month brand-name drug like Humira, your out-of-pocket is $300. But if you’re on a $400 generic, you pay $100. The math changes fast. And here’s the real kicker: you don’t hit catastrophic coverage until you’ve spent $8,000 out of pocket. That’s not your monthly bill - that’s your total spending for the year, including what your plan and the manufacturer paid. Most people don’t realize how long it takes to get there - especially if they’re on generics.How to Avoid the Donut Hole (Or Delay It)
You can’t always avoid it, but you can delay it - and that matters. If you’re on a tight budget and your meds are piling up, try spreading your refills across different pharmacies. Some plans count each pharmacy’s spending separately until you hit the total. If you refill your blood pressure med at CVS in January and your cholesterol pill at Walgreens in June, you might not hit the $5,030 mark until November. That buys you months of lower costs. Another trick: switch to 90-day supplies through mail-order pharmacies. Many plans charge less for 90-day fills - sometimes 15-25% lower than three separate 30-day fills. That means fewer trips to the pharmacy and fewer charges adding up. If you’re on a $120 monthly drug, a 90-day supply might cost $300 instead of $360. That’s $60 saved every three months.Use Manufacturer Discounts - They’re Not Optional
If you’re on a brand-name drug, you’re already getting a 70% discount from the manufacturer. But you won’t see it on your receipt. That discount is applied behind the scenes. What you need to do is check if your drugmaker offers a patient assistance program - and sign up for it. Companies like Amgen, AbbVie, and Pfizer have programs that cut your cost even further. One Medicare beneficiary on Reddit shared that her Repatha cost dropped from $560 to $5 a month during the donut hole because she qualified for Amgen’s program. That’s not rare. A 2023 study in the Journal of Managed Care & Specialty Pharmacy found these programs reduce out-of-pocket costs by 63% to 92% for brand-name drugs. Don’t wait until you’re in the gap to apply. Apply as soon as you start taking the drug. Most programs require a doctor’s note and proof of income, but they’re free to join. You can find them through the Partnership for Prescription Assistance or directly on the drugmaker’s website.Switch to Generics - When It’s Safe
If your doctor says it’s okay, switching from brand to generic can save you $1,200 to $2,500 a year. For example, switching from the brand-name statin Lipitor to atorvastatin saves about $1,800 annually. Same active ingredient. Same effect. Different price tag. But don’t assume all generics are cheap. Some newer generics still cost a lot. Use GoodRx or the Medicare Plan Finder tool to compare prices. Type in your drug and your zip code. You’ll see which pharmacy offers the lowest cash price - even if you’re not on insurance. Sometimes the cash price is lower than your copay.
Apply for Extra Help (Low-Income Subsidy)
If your income is below $21,870 (single) or $29,580 (married), you might qualify for Extra Help. This federal program pays your Part D premiums, deductibles, and copays - and it eliminates the donut hole entirely. About 12.6 million people qualified in 2023, but only half applied. Applying is simple. Go to SSA.gov/extrahelp or call Social Security at 1-800-772-1213. You can also ask your local State Health Insurance Assistance Program (SHIP) for help. They’ll walk you through the form. If you’re approved, you’ll get a letter and your pharmacy will automatically apply the discount. No more surprise bills.Check Your Plan Every Year - Even If You’re Happy
Your plan changes every year. The drugs you take might move to a higher tier. Your copay might go up. Your pharmacy network might shrink. The Annual Notice of Change (ANC) arrives in September. Read it. Don’t ignore it. Use the Medicare Plan Finder tool. Enter your exact medications, dosages, and preferred pharmacy. Compare all plans in your area. You might be paying $1,000 more than someone else with the same drugs. The National Council on Aging found that people who shop around save an average of $1,047 a year.What’s Changing in 2025 (And How to Prepare)
Starting January 1, 2025, the donut hole disappears. You’ll pay nothing after you’ve spent $2,000 out of pocket on covered drugs. That’s it. No more complex math. No more waiting until $8,000 to get help. Your plan will have three phases: deductible (up to $590), initial coverage (up to $2,000 out-of-pocket), and catastrophic (free drugs after that). Manufacturer discounts still count toward your $2,000 cap - but now, they’re smaller (10% during initial coverage, 20% in catastrophic). The system is simpler, but you still need to track your spending. Start now. Keep a log of every prescription you fill. Note the date, drug name, and what you paid. That way, when 2025 rolls around, you’ll know exactly where you stand. And if you’re already near the $2,000 cap, you might qualify for free drugs sooner than you think.
What to Do If You Can’t Afford Your Meds
If you’re skipping doses, splitting pills, or skipping refills because of cost - you’re not alone. A 2023 survey by the Medicare Rights Center found 32% of people in the donut hole skipped doses. That’s dangerous. Don’t wait. Talk to your doctor. Ask: “Is there a lower-cost alternative?” “Can I get a sample?” “Is there a patient program?” Also, check your state’s Medicare Savings Program. Thirty-seven states offer help with premiums and out-of-pocket costs for low-income beneficiaries. You might qualify even if you didn’t think you did.Real Stories, Real Savings
One woman in Ohio took Humira for rheumatoid arthritis. Her monthly cost during the donut hole was $1,200. She applied for AbbVie’s patient assistance program and got it for $50. She didn’t know it existed until she called her pharmacist. A retired teacher in Florida switched from brand-name metformin to generic - saving $1,500 a year. She used GoodRx to find the cheapest pharmacy in her town. Another man in Texas used mail-order for his blood thinner. His 90-day supply cost $220 instead of $280 for three 30-day fills. That’s $720 saved annually. These aren’t outliers. They’re people who took action.Final Checklist: What to Do Before December 31, 2024
- Review your Annual Notice of Change (sent in September 2024)
- Use the Medicare Plan Finder to compare plans for 2025
- Check if your drugs are on your plan’s formulary
- Apply for Extra Help if your income qualifies
- Sign up for manufacturer patient assistance programs
- Ask your doctor about generic alternatives
- Switch to 90-day supplies if possible
- Track every dollar you spend on prescriptions
The donut hole is ending. But until then, you have tools. You have options. You don’t have to choose between your health and your rent. Start today. Your future self will thank you.