Here is important information you need to know about owning a prescription drug plan:

• Annual Deductible — Every Part D plan has an annual deductible, though some plans waive it for lower-tier generic medications. In 2025, the maximum deductible is $590. Until the deductible is met, you’ll pay the full discounted cost for your prescriptions.

• Initial Coverage — After the deductible is satisfied, you move into the initial coverage stage. Here, you pay copays or coinsurance amounts based on your plan’s formulary (drug list). Medications are separated into tiers, typically including generics, preferred brands, non-preferred brands, and specialty drugs. The cost you pay depends on the tier your medication falls under.

• Out-of-Pocket Cap (NEW for 2025) – The “coverage gap” (donut hole) no longer exists. Instead, there is now a $2,000 annual out-of-pocket cap on prescription drug costs. Once your personal spending reaches $2,000, you won’t pay anything more for covered medications for the rest of the calendar year.

• Why This Matters – This change provides predictability and peace of mind. No more donut hole, no more uncertainty — once you hit the $2,000 cap, you’re protected from further costs on covered prescriptions.