Since 2011, we've helped more than 5 million people understand their Medicare coverage.
Get coverage now!
* By shopping with our third-party insurance agency partners. You may be contacted by a licensed insurance agent from an independent agency that is not connected with or endorsed by the federal Medicare program.
We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1–800– MEDICARE to get information on all of your options.
Medicare Part D – prescription drug coverage
Medicare Part D subsidizes the costs of prescription drugs for Medicare beneficiaries. Enrollees select Part D coverage by enrolling in either a prescription drug plan (PDP) or a Medicare Advantage plan (MAPD).
How did the Medicare donut hole change for 2023?
The thresholds where an enrollee enters and exits the Medicare donut hole increased for 2023. The initial coverage limit increased to $4,660, and the threshold for exiting the donut hole increased to $7,400.
Catastrophic coverage is part of Medicare Part D. An enrollee transitions to catastrophic coverage when their drug spending has reached a certain level (the amount adjusts annually); for the remainder of the year, they pay 5% of the cost of their covered drugs, or a small copay, whichever is greater (for most people who reach the catastrophic threshold, the 5% coinsurance is the larger amount).
As of 2024, there will no longer be any Part D out-of-pocket costs for enrollees who have reached the catastrophic coverage phase. This will effectively cap total actual out-of-pocket spending at about $3,250 in 2024. (Note that this refers to the actual amount that a person pays at the pharmacy, and is not the same thing as TrOOP, which is described below.)
The elimination of out-of-pocket costs during the catastrophic coverage phase is due to the Inflation Reduction Act, which was signed into law in August 2022. Most Part D enrollees do not reach the catastrophic coverage phase in any given year. But for those who do, drug costs can be prohibitively expensive. There has never been a cap on how high a person’s Part D costs can be, and the 5% coinsurance can really add up if a person needs very expensive medications. So the Inflation Reduction Act’s impact will be particularly helpful for people who routinely hit the catastrophic coverage phase.
For reference, standard Part D plans are organized with four phases of coverage, depending on how much a person’s drugs have cost so far that year: