Gap insurance coverage is becoming very popular. People buy gap insurance for a number of life areas where a standard policy wouldn't apply. A valuable heirloom may not be adequately covered in a standard homeowner's policy, so someone will buy insurance specific to that article. This type of insurance can fall under the general term "gap insurance". Sometimes, people want to insure their assets against claims that exceed the standard homeowner's or auto insurance policy. It would be cost prohibitive to insure large amounts on both policies, so, many people buy a type of gap insurance called an "umbrella policy" that covers any personal liability in excess of their existing coverage. The specific type of gap insurance coverage we'll be examining involves medical expenses...usually for Seniors. The 3 major types of gap insurance marketed to Seniors are Medi-gap Insurance, Prescription Medicine Plans and Hospitalization Insurance.
Medi-Gap Insurance is a specific insurance coverage designed to accompany Medicare, so that the Medicare patient pays nothing for covered medical services. For more information on Medicare qualifications and coverage, see our pages on Medicare and Medicaid Use and Abuse. This gap insurance coverage is often unnecessary when you have full primary medical coverage under an HMO or PPO plan. Sometimes, however, there are special situations that "slip through the cracks" and require you pay. These are usually so small as to warrant just writing the check, but, if you want to make sure everything is covered, medi-gap insurance can help. If you're relying on Medicare alone to provide your health care needs, you will definitely need something in addition to what Medicare covers. Medicare has limits on what it will pay in certain instances, and large premiums and co-payments on some services. If you're buying Medi-Gap Insurance, make sure it's from a Medicare authorized provider. You can find Medicare approved Medi-Gap Insurance providers through Medicare Coverage and Gap Insurance. This insurance is usually reasonably priced, since Medicare covers about 75% of medical costs...excluding medicine and long term assisted living.
This gap insurance is specifically for prescription drugs. Basic Medicare does not cover Prescription drugs but you can buy prescription drug plans through Medicare that cover much of the cost...and gap insurance to cover the remainder. Because prescription drugs are the fastest growing area of medical costs and the policy is new and evolving, it's best to go through Medicare to take part in their prescription drug plans than to buy another of the many offered on TV and elsewhere. If your HMO or PPO medical plan covers prescription drugs, this is probably superior to any you can get through Medicare at least currently (2005).
There are many plans that claim to offer benefits in the event you are hospitalized, regardless of any other insurance you may have. Be sure to read the fine print before paying for these plans. Medicare pays nearly 100% of all hospitalization (except for very long term). Often, these plans exclude hospitalization paid for by Medicare (or Government entity or some other vague wording)...so...never pay anything. If you buy this insurance, make sure your plan pays the benefit directly to you and that it pays regardless of whether your hospital bill is paid by any other means. If the plan doesn't state this in writing, don't buy the plan...you don't need it.
Whenever you enter into insurance coverage contracts, it's best to have your lawyer review them and explain anything you don't understand. An unscrupulous company often hides tricks behind legal wording that's difficult to understand. You can pay premiums for years and, when you make a claim for benefits, be informed that a loophole excludes you from any benefits. If you know up front what the policy says, it can save you a lot of trouble later.
Let's conclude this depressing subject on a positive note. No matter what medical expenses you encounter...no matter how scary and uncertain this subject is...there is one Person who loves you and is watching out for you all the time. That Person is God. If you want God's help to get through this phase of life, click on God Help Me.
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