Understanding Medicare Part D doesn’t have to be complicated. At Medicare Mall, we’re here to help you make informed choices about your prescription drug coverage.
Below are essential terms and definitions to help you navigate Medicare Part D.
Affordable Care Act (ACA)
The Affordable Care Act, signed into law in 2010, included key changes to Medicare Part D. One major change:
Medicare beneficiaries in the donut hole (coverage gap) receive discounts on brand-name and generic drugs.
The ACA’s goal was to eliminate the donut hole by 2020 — and as of 2025, the gap has effectively been closed for most beneficiaries.
For updates on Medicare reform, visit our blog.
Medicare Part D Benefit Stages (2025)
Medicare Part D plans include four stages of coverage each year:
Deductible Stage
You pay 100% of drug costs until your plan’s deductible is met (up to $545 in 2025).
Initial Coverage Stage
After the deductible, you pay copayments or coinsurance, and your plan covers the rest.
Coverage Gap (“Donut Hole”)
You pay up to 25% of drug costs for both brand-name and generic drugs.
Catastrophic Coverage Stage
After reaching a $8,000 out-of-pocket max, you pay no more than a small coinsurance or copay for the remainder of the year.
Formulary
A formulary is the list of prescription drugs your Medicare Part D plan covers.
Plans differ in which drugs they include, so it’s crucial to check the formulary to ensure your medications are covered.
What Is Medicare Part D?
Medicare Part D is the federal program that helps lower prescription drug costs for people enrolled in Medicare.
You can enroll in a standalone Part D plan or get drug coverage through a Medicare Advantage plan that includes Part D.
Need Help Choosing a Prescription Drug Plan?
Contact Medicare Mall today or click the button below to receive expert guidance through the Medicare Part D process.
We’ll help you evaluate plans, understand your options, and choose the one that best fits your needs and budget.