Is Medical Gap Insurance Worth It?

Jenifer Dorsey
February 26th, 2020 November 9th, 2015 |
Read time: 9 minutes
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Having major medical insurance doesn’t mean paying your premium and enjoying an all-access pass to healthcare. In reality, you are responsible for coinsurance, copayments and non-covered expenses, as written in your health insurance policy regardless of whether you buy your own health insurance or get it through a parent, partner or employer.

The expenses your health insurance company doesn’t reimburse you for are known as out-of-pocket costs. The amount of out-of-pocket costs you incur is dependent on several factors including your healthcare needs and your health insurance benefits.

A 2014 study by The Commonwealth Fund found that Americans pay more out of pocket for healthcare expenses today than they did 10 years ago.[1] According to the study:

  • More than 1 in 5 adults age 19 to 64 who were insured all year spent 5 percent or more of their income on out-of-pocket costs, not including premiums; 13 percent spent 10 percent or more
  • 3 in 5 low-income adults and half of those with moderate incomes said their deductibles were difficult to afford
  • 2 in 5 adults with private insurance who had high-deductible health plans said they delayed needed care because of their deductible

Because it can be difficult for some of us to pay for our healthcare out of pocket, particularly when an accident or critical illness occurs and medical bills can exceed standard office-visit amounts, there are medical gap insurance plans to help with the bills your health insurance plan doesn’t cover.

What is medical gap insurance?

Medical gap insurance is a type of supplemental health plan. This coverage is not major medical insurance, nor is it ACA-compliant. However, it can work in tandem with your ACA-compliant health plan.

What benefits do medical gap plans offer?

A medical gap plan such as Metal Gap or Metal Gap 2 (i.e., the medical gap plans available through provides lump-sum benefits for covered accidents and critical illnesses. These payments can be used however the insured individual chooses, including but not limited to the following:

  • Medical bills before one’s deductible has been reached
  • Coinsurance and copayment amounts
  • Prescription medications
  • Living expenses such as groceries, rent/mortgage, fuel, and more
  • Non-covered healthcare expenses

Medical gap plans offer additional financial protection beyond your major medical plan provides and can help lessen the financial impact when you need unexpected medical care.

How does medical gap insurance work?

When a covered accident or illness occurs, a medical gap plan will pay benefits according to the policy selected. Click here for an illustrated example of how medical gap insurance plans such as Metal Gap 2 help take the sting out of healthcare costs.

Is medical gap insurance right for you?

If you are looking to make your bronze plan benefits feel more like a gold plan—but at a lower price—a medical gap can be plan a great addition to your personal benefits package.

Ultimately, however, whether or not a medical gap plan is worth it for you depends on your healthcare needs and your financial situation. If you need help determining what health insurance coverage you need for the year to come, consult with a producer (i.e., agent or broker).

It is worth noting that your pre-existing conditions won’t impact your eligibility for the Metal Gap and Metal Gap 2 plans available at These plans are guaranteed issue, which means you qualify regardless of your health history.

How much is a medical gap plan?

What you pay for a medical gap plan at depends on which plan you select. Metal Gap plans cost about $1 per day, while the cost of a Metal Gap 2 plan will vary.

While you can’t apply your premium tax credit to a medical gap plan premium, some individuals who receive subsidies turn around and use the savings to buy additional healthcare benefits such as those available through a medical gap plan (or a dental plan, critical illness policy or telemedicine package).

To learn more, determine which plans are available in your state, and get a quick and easy quote, visit and call 888-855-6837 to speak with an IHC representative.


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Originally Published On November 9th, 2015
Independence American Insurance Company and/or Madison National Life Insurance Company, Inc. may underwrite the products referenced on this website. Legal Disclaimers.