The Medicare donut hole confused beneficiaries for years. In 2026 it is gone for good. Here is what replaced it and what it means for your costs.
Is there still a donut hole in 2026?
No. The donut hole — formally the Part D coverage gap — was permanently eliminated beginning in 2025. Previously, after you and your plan spent a set amount, you fell into a gap where you paid a larger share until catastrophic coverage kicked in. The Inflation Reduction Act removed that phase. For 2026, Part D has a simpler structure: a deductible phase, an initial coverage phase, and then catastrophic coverage once you hit the $2,100 out-of-pocket cap. After the cap, covered drugs cost you $0.
What replaced the donut hole?
The coverage gap was replaced by a hard annual out-of-pocket maximum — $2,100 in 2026. Instead of dropping into a confusing gap with higher costs, your spending simply moves toward the cap, after which you pay nothing for covered drugs. Insulin stays capped at $35 monthly and recommended vaccines are free. If high early-year costs are a concern, the Medicare Prescription Payment Plan can spread your out-of-pocket spending across monthly installments. For help understanding your 2026 costs, call 1-800-MEDIGAP.