About Medical Gap Insurance

Do you know what Gap Insurance is? You may think we are talking about Medicare Supplements or Short-Term Medical Plans (STM), but we are not. In this article, when we mention individual gap insurance, we are referring to a combo accident, critical illness, and hospital indemnity policy. These three coverages together help cover the major out of pocket expenses that people incur when you have a major illness, an accident or have a trip to the hospital. Group and Individual health insurance are great, but just because you have insurance does NOT mean that all your expenses are covered. That is where gap insurance comes in.

Since the Affordable Care Act (ACA) came into place in 2014, the out of pocket maximums in each state have continued to grow, which means that your coverage typically has you coming up with more money on the front end if something major happened.

Breaking Down Gap Insurance

Individual gap insurance is sold to individuals and families that are looking to cover the out of pocket expenses that come from going to the hospital, being diagnosed with a critical illness, or a variation of accidents. This is not Medicare Supplement or Medigap insurance. Let’s break down this combo policy and analyze the three pieces:

1. Hospital Indemnity Plan: A hospital indemnity plan will pay you by either a per day or per hospital admission benefit. For example, a policy may pay you $1,000 per day for each day you are in the hospital or it may pay you $2,500 per occurrence/hospital admission. Some people would rather be paid by day and some people by admission but that really depends on your preference.
2. Critical Illness Plan: Acritical illness policy covers heart attack, cancer, stroke and about 10 other conditions that are considered a critical illness. The policy has a specific benefit it pays upon being diagnosed with this illness. Sometimes people purchase cancer policies, but critical illness policies are much better because of the wide range of illnesses that they cover.
3. Accident Plan: An accident plan covers you in situations that are non-sickness. An example would be playing baseball with your buddies and you pull a hamstring running for a ball in the outfield. This is an accident not a true sickness. This plans typically pay a benefit per procedure.

We hope that this helps you have a clear understanding of gap insurance. If your current health plan leaves you with large out of pocket amounts — you need gap insurance, so you don’t end up with huge medical bills! Get gap coverage today and compare the plans available to you just by entering you zip code below: