Catastrophic coverage

Through 2024, most Medicare Part D plans have a coverage gap (also called the "donut hole"). This means there's a temporary limit on what the drug plan will cover for drugs. In 2024, you won’t get catastrophic coverage unless your out-of-pocket spending reaches $8,000.

Because of the prescription drug law, the coverage gap ends on December 31, 2024.

New for 2025: $2,000 cap on covered Part D drugs

Starting in 2025, all Medicare plans will include a $2,000 cap on what you pay out-of-pocket for prescription drugs covered by your plan. If your out-of-pocket spending on covered drugs reaches $2,000 (including certain payments made on your behalf, like through the Extra Help program), you’ll automatically get “catastrophic coverage.” That means you won’t have to pay out-of-pocket for covered Part D drugs for the rest of the calendar year. If you have a Medicare plan with drug coverage, compare plans during Medicare Open Enrollment (October 15 – December 7) to make sure your plan covers the drugs you take and meets your needs.

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Under the standard drug benefit, once you and your drug plan have spent $5,030 on covered drugs in 2024, you're in the coverage gap. Not everyone will enter the coverage gap (people with Medicare who get Extra Help paying Part D costs don’t have a coverage gap). You won’t exit the coverage gap and get catastrophic coverage unless your out-of-pocket spending reaches $8,000.