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Coverage Gap

Also known as: Donut Hole

A phase in Medicare Part D drug coverage where cost-sharing increases — reduced significantly since 2024 under the Inflation Reduction Act.

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The Medicare Part D coverage gap (colloquially the 'donut hole') historically was a period in the calendar year where drug cost-sharing significantly increased after a beneficiary's total drug costs exceeded the initial coverage limit. The coverage gap required patients to pay a larger share of drug costs until a catastrophic threshold was reached.

The Inflation Reduction Act of 2022 effectively eliminated the coverage gap as a significant issue for most Medicare beneficiaries starting in 2024. The catastrophic coverage phase now kicks in earlier, and the 2025 implementation caps total out-of-pocket drug spending at $2,000 per year.

For people with diabetes, the most relevant impact: insulin costs are capped at $35/month in Part D regardless of coverage phase. Expensive diabetes medications (GLP-1 agonists like semaglutide, which can cost $800–1,000/month at retail) are now subject to the $2,000 annual out-of-pocket cap.

Related diabetic supply categories

Insulin Pumps Supplies

Related terms

  • Medicare Part D — The Medicare prescription drug benefit — covers insulin and many diabetes medications, separate from the DME covered under Part B.
  • Formulary — The list of drugs covered by a Medicare Part D or Advantage plan, organized into cost tiers.
  • Insulin — A hormone that allows cells to take up glucose from the bloodstream — administered by injection or pump in diabetes treatment.
  • Prior Authorization — Insurer approval required before certain expensive supplies or medications are covered.

Frequently asked

What is Coverage Gap?

A phase in Medicare Part D drug coverage where cost-sharing increases — reduced significantly since 2024 under the Inflation Reduction Act. The Medicare Part D coverage gap (colloquially the 'donut hole') historically was a period in the calendar year where drug cost-sharing significantly increased after a beneficiary's total drug costs exceeded the initial coverage limit. The coverage gap required patients to pay a larger share of drug costs until a catastrophic threshold was reached.

How does Coverage Gap relate to Medicare coverage?

Medicare Part B covers most durable medical equipment related to Coverage Gap. Contact us to verify your specific coverage for related diabetic supplies.

Where can I get diabetic supplies related to Coverage Gap in Phoenix?

We deliver Medicare-covered diabetic supplies throughout the Phoenix metro area. Call us or complete the form above to verify your coverage.

Questions about Medicare coverage for diabetic supplies? We answer the phone in under 60 seconds.

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