What the donut hole was
From Part D's start in 2006 through 2024, drug coverage had four stages. After you and your plan spent a set amount, you entered a coverage gap, nicknamed the donut hole, where you paid a larger share of your drug costs until you reached catastrophic coverage. Until 2024, people still paid a small share even in catastrophic coverage, so there was no true yearly limit.
What Part D looks like now
Medicare now describes three stages:
| Stage | What you pay in 2027 |
|---|---|
| Deductible | The full cost of covered drugs until you meet your plan's deductible, if it has one (no more than $700) |
| Initial coverage | Your plan's copays or coinsurance until your out-of-pocket spending reaches the cap |
| Catastrophic coverage | Nothing for covered Part D drugs for the rest of the year, once you've paid $2,400 |
Covered insulin is capped at $35 for a one-month supply in every stage, with no deductible, and adult vaccines recommended by the CDC's advisory committee, such as the shingles shot, cost $0 under Part D.
What to check instead, in North Carolina
With a hard cap in place, the questions that matter when you compare North Carolina's 11 standalone Part D plans, or a Medicare Advantage plan with drug coverage, for 2027 are different:
- Is each of your drugs on the plan's formulary, and with what rules (prior authorization, step therapy, quantity limits)?
- How much do you pay before the cap? That depends on the deductible, the tier and your pharmacy.
- Is your pharmacy in the plan's network, and is it a preferred pharmacy? In rural counties, check the pharmacy you actually use.
- Do you qualify for Extra Help? It lowers premiums, deductibles and copays, and you get it automatically with full NC Medicaid or MQB, North Carolina's Medicare Savings Programs. See Extra Help in North Carolina.
Look up your drugs on PlanMatch or Medicare.gov's Plan Finder before December 7, 2026, or request a call from a licensed insurance agent to compare plans from the companies they work with. More on how the cap is counted in What is the Part D out-of-pocket cap for 2027?
Related questions
What is the Part D out-of-pocket cap for 2027?
What counts toward it.
What is the Medicare Prescription Payment Plan?
Spreading costs over the year.
Which drugs have negotiated prices in 2027?
The 2027 CMS list.
Sources
- Medicare.gov — How much does Medicare drug coverage cost? (coverage stages)
- Medicare — Your Guide to Medicare Drug Coverage (June 2026)
- CMS — CY 2027 Rate Announcement (2027 Part D deductible and out-of-pocket threshold)
- Medicare.gov — Shingles vaccines
- CMS — Medicare Advantage and Part D Landscape files, 2027 (PDP Region 08: North Carolina)
More questions in this guide
- Does North Carolina have a prescription assistance program for seniors?
- How many Part D plans are available in North Carolina for 2027?
- What is the Medicare Prescription Payment Plan?
- What is the Medicare Part D out-of-pocket cap for 2027?
- Which drugs have Medicare negotiated prices for 2027?
Part of the guide: Medicare Part D in North Carolina · All questions
Frequently asked questions
When did the donut hole end?
January 1, 2025. The Inflation Reduction Act removed the coverage gap stage and set a yearly out-of-pocket cap for Part D, which was $2,100 in 2026 and is $2,400 in 2027.
Why do some websites still mention the donut hole?
Many pages were written before 2025 and never updated. If a page describes a coverage gap stage for 2026 or 2027, it's out of date.
Can I still face high drug costs early in the year?
Yes. You can still pay a lot before you reach the cap, especially with a specialty drug. The Medicare Prescription Payment Plan lets you spread those costs into monthly bills.
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