Gap Health Insurance

Supplemental insurance to help fill the gaps in your major medical plan
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Individual Marketplace major medical deductibles in 2020 range from $1,519 (Gold plan) to $6,506 (Bronze plan).[1]

Do you have enough money (or funds in a health savings account) to meet your annual major medical deductible if you have a covered accident or critical illness? If not, think gap health insurance.

For example, gap insurance can include critical illness + accident insurance coverage that provides a fixed lump-sum benefit as a result of a covered critical illness. This lump-sum payment can be used any way you see fit. Accident coverage is available for covered expenses incurred, up to a maximum benefit limit, whichever is less.

What Does Gap Health Insurance Cover?

Individual medical gap plans vary in what they cover, so you’ll want to read the details of any plan you’re considering closely. The coverages listed below are examples that are commonly part of many gap health plans.

What Gap May Cover

  • Broken bones

  • Life-threatening cancer

  • Heart attack

  • Kidney failure

  • Stroke

  • Coma

  • Coronary bypass

  • Loss of sight, speech or hearing

  • Major organ transplant

  • Paralysis

  • Severe burn

What Gap May Not Cover

  • Preventive care such as routine physicals

  • Any non-medically necessary or experimental procedures

  • Injuries or illness related to participating in extreme or dangerous activities (rock climbing, skydiving, private aviation, etc.) or sustained at work or under the influence of drugs or alcohol

  • Medical expenses incurred prior to the policy effective date or after the expiration date

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Pros and Cons of Gap Health Insurance

  • You choose how to use benefits payments – There is no restriction on how to use the money you receive, whether for medical costs or to pay for groceries.
  • Apply year-round – There is no official open enrollment period and, in most cases, coverage begins the next day after you enroll online.
  • A plan for every budget – There are different levels of coverage to meet different needs.
  • Keep your doctor – No provider network limitations for fixed indemnity plans means you can visit your preferred healthcare provider.
  • Unlike ACA plans, premiums are based on age and health – The younger and healthier you are the lower your monthly premium, conversely, older and sicker individuals will pay more.
  • Pre-existing conditions are not covered
  • Not ACA-qualifying major medical coverage – Gap insurance is a form of supplemental health insurance, not ACA-qualifying major medical coverage.

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Who Should Get a Gap Health Plan

A gap plan may be a good option for you if you:

Are you stuck with a high deductible health plan, wondering how to pay for your deductible should you need to use your insurance?

Medical Gap can help by paying a lump sum benefit that can be used towards your HDHP deductible.

Learn more

How Gap Health Insurance Works

Here are a couple of examples to help illustrate how gap health insurance works:

  • If you have a covered $30,000 cancer expense, your $10,000 maximum gap plan benefit will pay out in full and the policy will be exhausted.
  • If you break your arm and it costs $3,000 to set it, your gap plan will pay $3,000. If you incur another injury or illness that costs $8,000, you will only be able to collect $7,000, or the remaining balance for the policy.

You pay monthly premiums in order to maintain your gap health plan and receive coverage for eligible events.

Present your insurance card when you receive medical care. The insurance company receives your bill and pays you a lump-sum benefit based on the covered services provided.

Your medical gap insurance does not coordinate benefits with any other health insurance you carry. If you’re using a gap plan alongside a major medical plan, your major medical policy also processes payments to the healthcare provider as usual and bills you for your coinsurance and deductible amounts (which you can then use your gap benefits to pay for if you choose to).

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Got More Gap Insurance Questions?

Here, “gap” insurance refers to a category of supplemental health insurance products. These types of plans may pay lump sum benefits when you experience a covered accident or illness. This type of plan is designed to supplement your major medical insurance plan coverage, not replace it. Generally, gap health insurance benefits can help cover out-of-pocket expenses (such as deductibles, copayments or coinsurance) that you may incur before your major medical insurance plan begins paying its share of your covered expenses. Please note that the type of supplemental gap insurance described here is not the same thing as a Medicare Supplement (“Medigap”) plan. Individuals that are not eligible for Medicare may still be able to obtain a supplemental gap policy.
No, gap health plans are not qualified health plans under the terms of the Affordable Care Act (ACA). Rather, they are designed to supplement the benefits you receive from your ACA plan.
Generally, no. Healthcare expenses related to pre-existing conditions are not covered by medical gap plans.
All Gap Insurance FAQs

How Much Does Gap Insurance Cost?

Gap medical premiums are typically affordable.

For example, a 46-year-old woman in Phoenix, Arizona, can get a mid-level gap plan for $27.82 per month.[2]

And with different benefit amounts to choose from, you can customize a plan that fits your budget.

It’s important to read and understand the coverages and benefits included in any plans you’re considering in order to know if the plan makes sense for you and your budget.

Find out how much it will cost you each month to close your deductible gap.

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2 Ways to Get Started with a Gap Health Insurance Plan

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Independence American Insurance Company and/or Madison National Life Insurance Company, Inc. may underwrite the products referenced on this website. Legal Disclaimers.

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