Gap Health Insurance

Gap Health Insurance

Gap Health Covers Deductible and Max Out of Pocket in 2021

This is true gap coverage. This is not multiple supplemental insurance policies, pulled together to, cover out of pocket expenses.

With a major medical health insurance plan, you have a deductible. you have a coinsurance, and you have a maximum out of pocket.

Let’s say a person has a $3000 deductible health insurance plan with a coinsurance of 70 /30; and a maximum out of pocket of $4500. Most health insurance beneficiaries only look at what their deductible is. But the true number to look at is the maximum out of pocket. The annual maximum out of pocket is the maximum allowable amount an insured is responsible for paying in out of their own pocket during a given year (Not including monthly premiums).

This is the process of a typical major medical health insurance plan. There are HSA plans with no coinsurance, where the deductible and the max out of pocket are the same number, but let’s assume this is not an HSA plan.

Scenario of How This Major Medical Plan Would Work:

Let’s say something happens where you have a bill big enough to where you’re going to hit your maximum out of pocket, let’s say $10,000. You are in the hospital for a few days, and you get a bill of $10,000. What’s going to happen next?

  1. You will first be charged by the total deductible the 1st $3000 are completely on you, 100% just like car insurance.
  2. Then you’ll have your coinsurance, coinsurance means once you’ve hit your deductible, now your insurance carrier will start pitching in and covering a portion of the cost. In this scenario, you have a gold plan, which is 70 /30. Meaning health insurance is paying 70%. you’re paying 30% of the remaining $7,000.
  3. So eventually, what’s going to happen is you’re going to hit the maximum out of pocket on that. okay, and get to a point where in that year, you’ve been billed $4500 dollars.

$4500 isn’t great, and is a lot of money for a lot of folks. But what major medical plans do from there is cover the rest of the bills. Even if your bill was a million dollars, the most you could pay is what your maximum out of pocket is, which was $4,500 in this scenario.

So when we consult clients on their health insurance, the first thing that we really want to make sure that is understood is deductible, coinsurance, and maximum out of pocket, and most importantly, maximum out of pocket. If we’re thinking worst case scenario of course.

Gap Coverage Covers That $4,500

This brings us to the actual topic of this page, which is gap coverage. It’s really as simple as it sounds! It covers the gap of that first dollar you are billed towards your deductible, ideally all the way up to your maximum out of pocket limit.

Average working class Americans having to pay $4500 on top of health insurance premiums that are already super expensive are constantly on the edge of their health condition being the difference between saving money for retirement and/or having to work another 10+ years.

Why Haven’t I Heard of Gap Health Insurance?

Gap is kind of a newer concept in the health insurance world, and clients love it. Westfall Insurance is an advocate for the Trifecta Benefits Program. that is a special gap plan combined with a company wellness program that won’t be a secret for very long. In the past, typically, supplemental health insurance was sometimes referred to as gap coverage, because it helped fill the gaps. But the policies were not TRUE Gap Health insurances because specific conditions had to be met. There was, and still is accident insurance and hospital indemnity insurance.

While we love and support supplemental health benefits, especially on the individual side outside of workplace benefits, we have made the switch to really promoting gap coverage because of its simplicity. Countless clients that have gotten sick and only had an accident plan couldn’t claim any benefits and still had to pay all their out of pocket costs, and all the while they thought they were covered for it and were not happy.

With gap coverage. there is no need to worry, at least in terms of being covered if it’s an accident or sickness. It’s all covered under one plan. The only other supplemental plan that may still provide coverage not provided by the major medical carrier and the gap plan is a critical illness policy. A critical illness, including cancer, could require treatments at special facilities that require travel and lodging, which are not covered by the insurances.

More details on critical illness coverage can be found here.

Summary:

With a gap plan, you won’t have to pay or, in most cases, have to pay a dime of any of those first dollar costs (aside from prescriptions and maybe copays) so it’s true gap coverage.