Starting in 2025, Medicare beneficiaries will see a major improvement in prescription drug coverage: the elimination of the Part D “Donut Hole” or Coverage Gap.
At Hawaii SHIP, we are excited to share this important news to help kūpuna and caregivers better plan for prescription costs and healthcare expenses.
The “Donut Hole” was a coverage gap in Medicare Part D plans where, after reaching a certain spending limit, beneficiaries had to pay a larger share of drug costs out of pocket. It was a confusing and costly phase for many.
In the past, your drug costs would move through four phases each year:
Deductible Phase: You paid 100% of drug costs until meeting your deductible.
Initial Coverage Phase: You paid a share of costs (usually 25%) up to a certain limit.
Coverage Gap (Donut Hole): You paid higher out-of-pocket costs after reaching the limit.
Catastrophic Coverage Phase: You paid a small amount until the end of the year.
Starting in 2025, this confusing middle phase — the Donut Hole — will be eliminated.
In 2025, the new Part D structure will look like this:
Deductible Phase:
You pay for prescriptions until you meet the $590 deductible.
Initial Coverage Phase:
You pay 25% of drug costs until you reach $2,000 in out-of-pocket spending.
Catastrophic Coverage Phase:
Once you reach $2,000, Medicare Part D will pay 100% of your covered drug costs — you pay nothing for the rest of the year!
Key change:
👉 The maximum out-of-pocket cost for prescriptions will be capped at $2,000 per year.
Lower drug costs and no more surprise bills halfway through the year.
Simplified plan structure — making it easier to predict and budget for healthcare expenses.
Increased access to necessary medications without worrying about financial strain.
This historic improvement is part of the ongoing efforts to make Medicare stronger and more affordable for America’s seniors.
Hawaii SHIP offers free, one-on-one Medicare counseling to help you:
Review your current Medicare Part D plan
Compare plans during Open Enrollment
Understand your new out-of-pocket limits and savings
📞 Call us at 808-586-7299 or TTY 1-866-810-4379
🌐 Visit hawaiiship.org
Let’s navigate Medicare together — and make sure you get the full benefits you deserve!
