Greenville, SC Guide to Medicare Drug Coverage Changes

Does the Medicare “donut hole” still exist?

For most people with Medicare Part D prescription coverage, the traditional donut hole no longer exists. The coverage gap was eliminated beginning January 1, 2025, so Part D now generally has three stages: the deductible stage, the initial coverage stage, and the catastrophic coverage stage.

The phrase “donut hole” is still common because it describes how Medicare drug coverage worked for many years. Residents may also hear the term in older insurance documents, online discussions, or conversations with family members who remember having sharply higher prescription costs after reaching a certain spending level.

The modern Part D benefit is simpler, but drug costs can still vary substantially by plan, medication, pharmacy, deductible, and income-based assistance.

What are the current Medicare Part D coverage stages?

Medicare Part D coverage generally moves through three stages during each calendar year.

1. Deductible stage

If a plan has a deductible, the enrollee pays the full negotiated cost of covered prescriptions until the deductible is met. Some plans have no deductible, while others apply different deductible rules to different drug tiers.

For 2026, a Medicare drug plan’s deductible cannot exceed $615. A plan may charge less than that amount or may not have a deductible at all.

2. Initial coverage stage

After meeting the deductible, the plan begins sharing the cost of covered medications. The enrollee may pay a copayment, such as a fixed amount, or coinsurance, which is a percentage of the drug’s cost.

The amount depends on the plan’s formulary and tier structure. A generic medication may have a lower cost than a preferred brand-name medication, while specialty drugs often involve higher coinsurance.

This stage continues until the enrollee reaches the annual Part D out-of-pocket limit.

3. Catastrophic coverage stage

In 2026, annual out-of-pocket costs for covered Part D prescriptions are capped at $2,100. After reaching that limit, the enrollee pays nothing for covered Part D drugs for the rest of the calendar year.

The limit applies to covered prescription drugs under the Part D plan. It does not automatically apply to medications excluded from the plan, drugs purchased outside the plan’s coverage rules, or all health care expenses covered under Medicare Parts A and B.

What changed from the old donut hole?

Before 2025, many Part D enrollees moved from initial coverage into a coverage gap. During that gap, they often faced different cost-sharing rules, and medication expenses could feel unpredictable.

The coverage gap phase was removed beginning in 2025. The annual out-of-pocket limit was set at $2,000 for 2025 and increased to $2,100 for 2026.

This means that an enrollee no longer enters a separate coverage gap after reaching the initial coverage threshold. Instead, eligible out-of-pocket spending moves toward the annual limit and then into catastrophic coverage.

The change does not mean every prescription is free from the beginning of the year. Deductibles and copayments may still apply before the limit is reached.

Which prescription costs count toward the annual limit?

Generally, payments for covered Part D drugs that the enrollee makes through the plan count toward the out-of-pocket limit. Certain payments made on the enrollee’s behalf may also count, including assistance through the Medicare Extra Help program.

Premiums usually do not count toward the Part D out-of-pocket limit. Neither do payments for medications that are not covered by the plan, most over-the-counter products, or drugs paid entirely outside the Part D benefit.

A prescription that is not on the plan’s formulary may not receive the same coverage treatment as a covered medication. Prior authorization, step therapy, quantity limits, and restrictions on specialty drugs can also affect what the enrollee pays and whether the cost counts.

Keeping the plan’s Explanation of Benefits statements can help track progress toward the annual limit.

Does the $2,100 limit apply to everyone with Medicare?

The limit applies to people enrolled in Medicare prescription drug coverage, including stand-alone Part D plans and Medicare Advantage plans that include prescription drug coverage.

However, people with Extra Help may pay much less than the standard cost-sharing amounts and may reach lower personal spending levels. Extra Help is a federal program that assists eligible individuals with Part D premiums, deductibles, and prescription copayments.

Eligibility depends on income and resources. Some people qualify automatically, while others must apply. Changes in income, savings, household circumstances, or eligibility for Medicaid can affect whether assistance is available.

People in Greenville who are concerned about medication costs may also need to review whether they qualify for Medicare Savings Programs or other assistance that helps with broader Medicare expenses.

What does the Medicare Prescription Payment Plan do?

The Medicare Prescription Payment Plan allows eligible Part D enrollees to spread covered prescription costs across monthly payments during the calendar year.

This option can make expenses more predictable, especially for someone who expects high medication costs early in the year. It does not reduce the total amount owed, remove the plan’s deductible, or lower the price of the prescriptions.

The payment plan also does not change the annual Part D out-of-pocket limit. In 2026, covered Part D drug costs remain subject to the $2,100 cap even if the enrollee uses the monthly payment option.

A person considering this option should compare the payment schedule with household cash flow. A monthly bill may rise later in the year if additional prescriptions are filled or if high costs occur after the payment schedule is established.

Why can costs still change from one month to the next?

Even without a donut hole, prescription expenses may change because of:

• A new plan year and a new deductible
• A medication moving to a different formulary tier
• A change from a preferred pharmacy to a non-preferred pharmacy
• A new prior authorization or quantity restriction
• A generic becoming available or unavailable
• A doctor prescribing a different strength or formulation
• A plan changing its premium, copayments, or covered drug list for the next year

Seasonal household expenses can also make medication changes more difficult to manage. In the Greenville community, some households may be balancing prescription costs with heating, cooling, transportation, or other recurring expenses that vary during the year.

What should residents review before choosing or changing a plan?

A useful review begins with the medications taken regularly, including dosage and frequency. The plan should then be checked for:

• Whether each medication is covered
• The drug’s tier and expected copayment or coinsurance
• The deductible and whether it applies to the medication
• Pharmacy network rules
• Prior authorization or step-therapy requirements
• The plan’s monthly premium
• The annual out-of-pocket limit
• Whether the plan works with Extra Help or other assistance

Plan details can change each year, so a medication that was affordable in one year may cost more in the next. Comparing plans during Medicare’s annual enrollment period can help identify changes before the new coverage year begins.

The key point is that the old donut hole has been eliminated, but Medicare prescription coverage still has stages and plan-specific rules. For 2026, covered Part D drug costs are limited to $2,100 in annual out-of-pocket spending, and understanding the plan’s formulary and cost-sharing rules remains essential for budgeting.