Probably.  If you use a Special Enrollment Period to change Medicare Part D drug plans during the year, your drug purchase history moves with you to your new Medicare plan.  So if you are in the Donut Hole and then move to another Medicare Part D plan, most likely you will still be in the Donut Hole or Coverage Gap (assuming that your new Medicare plan has the same Initial Coverage Limit or ICL).

Changing Drug Plans?  Your retail drug costs and out-of-pocket spending move with you.

Your drug purchase transactions will transfer to your new Medicare prescription drug plan when you change plans during the year - so the retail value of formulary drug purchases (gross covered drug costs*) and your total out-of-pocket spending (TrOOP) move with you if you join another Medicare Part D prescription drug plan (PDP) or Medicare Advantage plan that offers prescription drug coverage (MAPD).

For example, if you purchase a Tier 3 Brand Name Drug that has a retail cost of $500 and you have a $47 co-pay - and then change Medicare Part D plans, the $500 gross covered drug cost and the $47 out-of-pocket cost both transfer to the new plan.

The Centers for Medicare and Medicaid Services (CMS) notes that, "[when you change Medicare prescription drug plans during the year, a] record of your drug costs will transfer with you to your new drug plan..." And your total covered drug costs will help your new Medicare Part D plan determine where you are within the phases of your new plan.

The Initial Coverage Limit (ICL) and entering the Donut Hole

Please remember that you enter your Medicare Part D Donut Hole when your retail drug costs exceed your plan's Initial Coverage Limit (the standard ICL is $5,030 in 2024) - not what you pay, but the actual retail value of your formulary drug purchases.

Question:  But isn't the Donut Hole closed?

Not exactly.  Although we say that the Donut Hole "closed" in 2020 since you receive a 75% discount on all formulary drugs, you will still leave your Medicare Part D plan's Initial Coverage Phase once your retail drug costs exceed the Initial Coverage Limit.  And when you leave your Initial Coverage Phase, you will enter the Coverage Gap (Donut Hole) where the cost of your formulary medications can increase, decrease, or stay the same - depending on your Medicare drug plan, your cost-sharing, and the drug's retail price.

You can click on our FAQ "Did the Coverage Gap or Donut Hole just close up and go away?" to read more.

The 2024 Medicare Part D Donut Hole

Starting in 2024, the Inflation Reduction Act (IRA) of 2022 eliminates cost-sharing for formulary drugs in the Catastrophic Coverage phase.  This means, if you exit the 2024 Donut Hole and enter the Catastrophic Coverage phase, you will pay nothing more (cost-sharing will be $0) for all formulary Medicare Part D drugs through the remainder of the year.



Important Update:  2024 is the last year for the Coverage Gap or Donut Hole.

Starting in 2025, the Inflation Reduction Act (IRA) eliminates the Coverage Gap (Donut Hole).  In 2025 and beyond, Medicare Part D beneficiaries will stay in the Initial Coverage phase until their out-of-pocket spending for Part D formulary drugs (TrOOP) reaches the maximum out-of-pocket spending limit for Part D formulary drugs (RxMOOP) - which is set at $2,000 for 2025.  After reaching RxMOOP, Medicare Part D beneficiaries will enter Catastrophic Coverage and have a $0 copay (no additional costs) for all formulary Medicare Part D drugs through the remainder of the year.

2025 Medicare Part D coverage



Example of when you may not be in the 2024 Donut Hole when transferring to a Medicare Advantage plan

Since Medicare drug plans (Part D and Medicare Advantage plans) are allowed to have an Initial Coverage Limit that is different from the standard ICL, it is possible to be in a plan with a low ICL (for example, $4,355), have retail drug spending of $4,400 and be in your drug plan's Donut Hole. So when you may move to a Medicare drug plan with the standard ICL (for example, $4,660), your new Medicare plan will look at your gross covered drug purchases ($4,400) and place you back into the plan's Initial Coverage phase since your gross retail drug purchases are under the new Medicare drug plan's ICL of $4,660.


Reminder:  A New Year started a new Donut Hole or Coverage Gap (until 2025)

The good news is that each January 1st starts a new Medicare Part D plan year and you will begin your annual Medicare Part D plan coverage all over again (with new Part D drug plan parameters).  So if you were in the Donut Hole on December 31st, you will no longer be in the Donut Hole on January 1st of the new plan year.


* Gross covered drug costs (GCDC) amount to the retail value of the formulary medications you purchase or "the total cost of drugs (including dispensing fee and sales tax) regardless of payer" and include "certain dispensing fees, but not including administrative costs."  The beneficiary’s accumulated gross covered drug costs determine" whether the "beneficiary is in the Deductible or the Initial Coverage Phase or has entered the Coverage Gap".

Additional CMS Source
PDE Manual p. 9-18, https://oig.hhs.gov/oei/ reports/oei-05-07-00610.pdf, and 42 CFR 423.308)

Medicare Prescription Drug Benefit Manual, Chapter 14 - Coordination of Benefits, (Rev. 18, 09-17-18) (https://www.cms.gov/ medicare/coverage/ prescription-drug-coverage-contracting/ prescription-drug-benefit-manual)