Does anybody know what a “Doughnut Hole” is? Well, let's just say that it is not something you eat... However, that's not entirely true either! Maybe not literally, but it is indeed something that seniors may have to eat as in “cost!”

It is referred to a gap in Medicare Part-D, which supposedly covers the prescription drug portion of Medicare (besides Part-A and Part-B, coverage for hospital and doctors respectively.)

Here's how Medicare Part-D works:

1. Seniors sign up for Part-D and it is not free. There is a premium that they have to pay
2. Seniors pays 25% of the cost of the drugs up to $2,700.00 (for 2009), where Medicare pays the remainder of 75%
3. When the cost of drugs goes over $2,700.00, Medicare does not pay anything up to $4,350.00 (in 2009), yet seniors still have to pay the premiums
4. When the cost goes over $4,350.00, Medicare pays 95% of the total cost of drugs, and seniors pay 5%

Let's do the math again in real numbers for the cost of prescription drugs (say) $10,000.00 for one year.

1. For the first $2,700.00, senior pays $675.00
2. Then senior pays $4,350.00
3. The remaining cost will be $147.50
4. So, everything totals to $5,172.50, which is about $430.00 a month (excluding the monthly premiums for Part-D)

Here's the real kicker; if we consider the average social security benefit for a retired worker to be $1,153.00 (according to Social Security Online) per month for 2009, that leaves a whopping $723.00 monthly income.

Whether to cry or laugh... your choice!