⚠️ Important 2026 Update: The Donut Hole No Longer Exists
The Medicare Part D Coverage Gap (the “donut hole”) was permanently eliminated on January 1, 2025 under the Inflation Reduction Act. Part D now has a hard annual out-of-pocket cap of $2,100 in 2026. Once your out-of-pocket spending reaches that cap, you automatically enter catastrophic coverage and pay $0 for covered drugs for the rest of the calendar year.
The tips below for saving money on prescriptions are still relevant under the new 2026 Part D structure — they just no longer apply to a coverage gap. See our Part D Costs page for the current 2026 structure.
If you’re a Medicare beneficiary trying to save money on prescription drugs, the strategies below can help. Originally written when the Part D donut hole still existed, this post has been updated for the 2026 Part D structure — the tips still apply, they just now help you reach (or stay under) the $2,100 annual out-of-pocket cap rather than avoid a mid-year coverage gap.
How Part D Costs Work in 2026
Before getting into the tips, here’s how Medicare Part D costs are structured in 2026:
- Deductible phase: You pay 100% of your drug costs until you meet your plan’s deductible (up to $615 maximum).
- Initial coverage phase: After the deductible, you pay 25% coinsurance on covered drugs until your out-of-pocket spending reaches $2,100.
- Catastrophic coverage phase: Once your out-of-pocket spending hits $2,100, you pay $0 for covered drugs for the rest of the calendar year.
The middle “donut hole” coverage gap that existed prior to 2025 no longer exists. Even so, $2,100 is a meaningful annual expense, and the tips below can help you minimize what you pay.
Tip 1: Talk to Your Doctor About Lower-Cost Alternatives
If you’re concerned about the cost of your medications, talk to your doctor about lower-cost alternatives. There may be alternative treatments or lower-cost medications that can help manage your condition. Your doctor may be able to prescribe a medication that’s in the same class as the one you’re currently taking but is less expensive. In some cases, there may be a generic version of the medication that’s much less expensive than the brand-name version.
For example, if you’re taking a brand-name medication for high blood pressure that costs $200 per month, your doctor may be able to prescribe a generic version that costs only $20 per month. Switching to the generic could save you well over $2,000 a year — and lower the chance that you hit the $2,100 out-of-pocket cap at all.
Tip 2: Use Prescription Drug Coupons
Another way to save on prescriptions is to use prescription drug coupons. Many pharmaceutical companies offer coupons for their medications that can help reduce the cost. These coupons can be found online or through your doctor’s office. Keep in mind that amounts you pay using manufacturer coupons may not count toward your $2,100 Part D out-of-pocket cap, so check with your plan.
Tip 3: Look for Prescription Assistance Programs
If you’re having trouble affording your medications, prescription assistance programs can help. Many pharmaceutical companies offer patient assistance programs that can help cover the cost of medication for people who can’t afford it. These programs may have specific eligibility requirements, so be sure to check with the manufacturer to see if you qualify.
In addition, the federal Extra Help program (Low-Income Subsidy) through Social Security can help people with limited income and resources pay for their prescription drug costs, including premiums, deductibles, and copayments. State Medicare Savings Programs may also provide help.
Tip 4: Review Your Part D Plan Every Year
Plan formularies, tiers, premiums, and deductibles change every year. The plan that was best for your specific medications this year may not be the best choice next year. During Medicare Open Enrollment (October 15 – December 7), compare plans to find one with the lowest total cost for the medications you actually take.
You can use the Medicare Plan Finder tool on the Medicare website to compare plans, or our licensed agents can do this comparison for you at no cost.
Tip 5: Use a Mail-Order Pharmacy
Using a mail-order pharmacy can be another way to save on prescription medications. Mail-order pharmacies can often offer lower prices on medications, especially for 90-day supplies. Many Medicare Part D plans offer lower copayments for mail-order prescriptions than for prescriptions filled at a retail pharmacy. Check with your plan to see if this is an option for the medications you take.
Tip 6: Consider the Medicare Prescription Payment Plan
New as of 2025: the Medicare Prescription Payment Plan lets you spread your out-of-pocket Part D costs into predictable monthly installments rather than paying large amounts at the pharmacy counter. This is especially useful if you take expensive medications and would otherwise hit the $2,100 cap early in the year. Enrollment in the payment plan is voluntary and free.
Final Thoughts
With the donut hole eliminated and a hard $2,100 out-of-pocket cap now in place for 2026, managing prescription drug costs is more predictable than it used to be. Still, the strategies above — lower-cost alternatives, coupons, assistance programs, annual plan reviews, mail-order pharmacies, and the Medicare Prescription Payment Plan — can meaningfully reduce what you pay each year. As always, discuss any changes to your medications or treatment plan with your doctor before making decisions.