If you’re wondering what the Medicare Part D coverage gap is, it’s a stage in how prescription drug costs are shared between you and your drug plan during the year. In 2026, the coverage gap still matters because your costs can change as you move through each Part D payment phase.
In plain terms, Medicare Part D does not charge the same copay all year for everyone. Your out-of-pocket costs depend on where you are in the year’s drug-cost stages.
As a BBB-accredited Medicare insurance agency, Texas Medicare Solutions helps Texans understand how Part D works so there are fewer surprises at the pharmacy. We’re licensed in Texas and focus on education first.
What Is the Medicare Part D Coverage Gap (Also Called the “Donut Hole”)?
The Medicare Part D coverage gap is the period after you and your plan have spent a certain amount on covered prescriptions, but before you reach the next level of protection (often called catastrophic coverage).
People started calling it the “donut hole” because it used to feel like benefits dropped in the middle of the year.
Today, the coverage gap is more about how your share of the costs is calculated during that middle stage.
The good news is that most people still get help through discounts and cost-sharing rules. The important part is knowing that your cost at the pharmacy counter can change.
What Are the Part D Cost Stages in 2026?
Think of Part D like a year-long track with checkpoints. Your drug spending moves you forward through four stages.
1. Deductible Stage
Some Part D plans have a deductible. If yours does, you generally pay the cost of your medications (at the plan’s negotiated price) until you meet that deductible.
2. Initial Coverage Stage
After the deductible (if your plan has one), you enter the initial coverage stage.
This is the stage many people recognize:
- You may pay a copay or coinsurance.
- The plan pays the remaining covered costs.
3. Coverage Gap Stage
Once the total amount spent on your covered prescriptions reaches the coverage-gap threshold, you enter the coverage gap.
The total spending can include:
- What you pay
- What your plan pays
During this stage, you typically pay a set share of the cost for covered medications instead of the same copay you paid earlier.
4. Catastrophic Coverage Stage
After your out-of-pocket spending reaches the next threshold, you move into catastrophic coverage.
During this phase, your cost per prescription is usually much lower than in earlier stages.
Note: The exact thresholds change every year. For the official numbers, visit Medicare.gov or call 1-800-MEDICARE.
How Does the Coverage Gap Affect What I Pay at the Pharmacy?
For many Texas seniors, the first sign of entering the coverage gap is a change in their normal pharmacy costs—especially for higher-priced brand-name medications.
Common signs include:
- Your monthly prescription cost increases compared to your earlier copay.
- Your price is calculated as a percentage of the medication’s cost.
- The timing often surprises people who begin expensive medications during the year.
It’s also common for costs to change when you:
- Switch medications
- Change dosage
- Use a different pharmacy
Does Everyone Reach the Medicare Part D Coverage Gap?
No.
Many people never reach the coverage gap.
You are more likely to reach it if you:
- Take several brand-name prescriptions
- Use specialty medications
- Receive a new diagnosis that changes your prescription list
- Start the year with higher medication needs
If most of your medications are lower-cost generics, you may remain in the Initial Coverage Stage throughout the year.
What Counts Toward Reaching the Coverage Gap and Catastrophic Coverage?
Part D calculates progress through its payment stages using specific rules.
Generally, progress is based on the total cost of covered prescriptions, not only what you personally pay.
Items that can count include:
- What you pay at the pharmacy
- What your plan pays
- Certain discounts that apply during the coverage gap
Items that generally do not count include:
- Medications that are not on your plan’s formulary (covered drug list)
- Purchases made outside your plan’s rules
Because these calculations can be confusing, it’s a good idea to:
- Keep your plan documents available.
- Review each Explanation of Benefits (EOB) throughout the year.
How Can I Plan for the Part D Coverage Gap in 2026?
You don’t have to guess. These practical habits can make the coverage gap easier to manage.
1. Keep an Updated Medication List
Write down:
- Every medication
- Dosage
- Pharmacy you use
Bring the list to appointments and keep it current.
2. Ask Your Doctor About Lower-Cost Options
When appropriate, your provider may recommend:
- A generic medication
- A different dosage form
- Another medication in the same class
Only your healthcare provider can determine what is medically appropriate.
3. Use Preferred Pharmacies
Many Part D plans include preferred pharmacy networks.
Using participating pharmacies may help reduce your costs.
4. Plan Major Prescription Changes Carefully
If you expect a medication change, ask your healthcare provider whether:
- It can safely wait until the beginning of the year, or
- It needs to happen immediately.
Your health always comes first, but timing may affect which payment stage you reach.
5. Review Your Part D Plan During AEP
The Annual Enrollment Period (AEP) is your opportunity each fall to compare plans for the following year.
Plans may change:
- Formularies
- Pharmacy networks
- Cost-sharing rules
Texas Medicare Solutions can help explain how Part D works and what questions to ask when reviewing plan options.
Your medications, preferred pharmacy, and budget are personal, so your plan shouldn’t be treated as a one-size-fits-all decision.
What Should I Do If I Think I’m in the Coverage Gap Right Now?
If you believe you’ve entered the coverage gap, follow these steps.
Check Your Latest EOB or Member Portal
Your plan typically shows which payment stage you’re currently in.
Confirm the Medication Is Covered
If a medication isn’t covered—or requires prior authorization—your costs may be very different.
Verify the Pharmacy Is Billing the Correct Plan
Billing mistakes occasionally happen.
Ask for Help Understanding Your Notice
If you’d like a second opinion, a licensed Texas Medicare Solutions agent can help explain the language and identify the right questions to ask your plan.
Is the Part D “Donut Hole” Gone?
You may hear that the donut hole has been “closed.”
Generally, this means the steep mid-year increase that existed years ago is no longer the same.
However, the coverage gap stage still exists as part of the Medicare Part D cost-sharing structure.
That’s why you’ll continue seeing it referenced in:
- Plan documents
- Explanation of Benefits (EOB) statements
Key Takeaway for Texas Seniors
The Medicare Part D coverage gap is a normal part of how Medicare prescription drug coverage is designed.
You may not always be able to avoid it, but you can:
- Understand how it works
- Recognize when you’ve entered it
- Plan ahead—especially if you take higher-cost medications
If you’d like help understanding your Part D payment stages and what they mean for your monthly prescription costs, Texas Medicare Solutions is here to educate and guide you through your options.
Frequently Asked Questions (FAQ)
What is the Medicare Part D coverage gap in simple terms?
It’s a middle stage of Part D where your share of prescription costs can change after total drug spending reaches a set threshold.
Do all Medicare beneficiaries reach the Part D coverage gap?
No. Many people never reach it, especially if they primarily take lower-cost generic medications.
How do I know which Part D stage I’m in right now?
Check your plan’s Explanation of Benefits (EOB) or your online member portal, which typically shows your current payment stage.
If my costs go up, does that automatically mean I’m in the coverage gap?
Not necessarily.
Prescription costs may increase because of:
- Coverage rules
- Pharmacy network changes
- Dosage adjustments
Your EOB is the best way to confirm.
Can I change my Part D plan if my medications change mid-year?
Sometimes.
Your ability to change plans depends on whether you qualify for a Special Enrollment Period (SEP).
Medicare.gov or a trusted licensed advisor can help determine your eligibility.