What Is Gap Medical Insurance?
Gap health insurance helps pay for expenses not covered by your main health insurance plan.
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Gap insurance is supplemental medical coverage that's usually used to help pay for the deductible, copays and coinsurance of a high-deductible health plan (HDHP).
It may be worth it to buy medical gap insurance to lower your medical costs when you have a cheaper health insurance plan. But before signing up, check that the total cost of the two plans is a better deal than buying one health insurance plan with better coverage.
What is gap health insurance?
Gap medical insurance helps you pay your medical bills, including your deductible, copays and coinsurance.
Gap medical insurance helps make medical care more affordable when you have a high-deductible health plan (HDHP).
- Gap insurance lowers your medical costs at the beginning of your policy before you reach the deductible of your regular health insurance plan. If you only had a high-deductible health plan, without gap insurance, you could have to pay thousands of dollars for your medical care before your insurance will start helping you pay for most health services.
- Gap insurance will continue to help you pay for your medical bills even after you meet the deductible of your main insurance plan. For example, if you had a $500 bill after going to the doctor, your main health insurance plan might pay $400. Your gap insurance plan would split the remaining $100 with you so you don't have to pay the full amount.
What does gap insurance cover?
Gap health insurance covers most health services that are covered by a regular health insurance plan.
However, there may be some health services that are only covered by regular insurance, not gap insurance. That’s because the government doesn’t make gap insurance follow the same rules and regulations as major medical insurance. For example, regular insurance is required to cover mental health services, while gap health plans aren’t.
It’s a good idea to compare your gap insurance and high-deductible health plan to check for differences in coverage. You should also be aware that gap health insurance may come with its own deductible, copays and coinsurance.
What to know about high-deductible health plans
High-deductible health plans have become more popular in recent years because they have had low rates even as the price of health insurance has risen. The IRS requires that insurance plans meet certain deductible and out-of-pocket maximum thresholds to qualify as HDHPs.
IRS requirements to qualify as an HDHP plan for 2025
HDHP rules in 2025 | Individual | Family |
|---|---|---|
| Lowest deductible a plan can have | $1,650 | $3,300 |
| Highest out-of-pocket max to qualify | $8,300 | $16,000 |
In 2025, a high-deductible health plan for an individual will have a yearly deductible that's $1,650 or higher and an out-of-pocket max that's $8,300 or lower.
- Deductible: The amount of money you have to pay before your insurance kicks in.
- Copay: A fixed dollar amount that you pay to access medical services once your deductible has been met.
- Coinsurance: A percentage of your medical costs you pay after meeting your deductible.
- Out-of-pocket max: The maximum dollar figure you’re responsible for paying in a single year.
The average HDHP deductible is $2,518 for an individual and $4,674 for a family, according to the latest data. That's roughly 40% to 50% higher than what the IRS requires.
That means the average individual would pay more than $2,000 out of pocket before health insurance would start paying for coverage. Gap health insurance coverage can help you pay for your deductible, copays and coinsurance up to your out-of-pocket max.
Medical gap insurance coverage benefits
Health insurance gap coverage combined with an HDHP can save you money on monthly premium costs while providing similar levels of coverage compared to a normal health insurance plan.
A high-deductible health plan (HDHP), on average, will save you $1,153 a year for the cost of health insurance compared to a PPO plan.
Say you paid $40 per month or $480 a year for a gap medical insurance plan to use alongside a high-deductible health insurance plan. The total cost of the two insurance plans is still $673 per year cheaper than a typical PPO plan. And it would help you keep your medical costs low.
You can apply your gap medical insurance to a number of expenses, such as deductibles, prescription medicine, copays and coinsurance.
Is medical gap insurance worth it?
Gap health insurance is usually worthwhile for a high-deductible health plan (HDHP) if you believe that your medical costs will be high enough to reach your out-of-pocket max. To find out if it's worthwhile, compare your anticipated out-of-pocket costs against your gap health plan’s annual price plus the out-of-pocket max.
For example, if you think you’ll pay $5,300 for your high-deductible health plan’s deductible and coinsurance, and you can purchase a gap policy with an annual premium of $480 and a $1,000 out-of-pocket max, then you can save $3,820.
Gap insurance isn’t the right solution for everyone. It’s important to be aware of the downsides and alternatives to gap insurance.
Who shouldn’t buy gap health insurance?
Gap health insurance may not be the right fit for every circumstance, including for more healthy individuals. Before you purchase gap health insurance, make sure you don’t fall into one of these categories.
- People who don’t visit the doctor often: Gap insurance might not be worthwhile if you have very low annual medical expenses.
- Individuals with preexisting conditions: Unlike more standard types of health insurance, gap insurance companies can charge people with preexisting conditions higher prices or even deny coverage outright.
- Those in need of mental health care: Many gap health insurance policies don’t cover mental health services.
Gap insurance vs. an HSA
Health savings accounts (HSAs) are the most common alternative to gap health insurance when purchasing a high-deductible health plan (HDHP).
- Gap insurance means buying a second insurance policy.
- An HSA, on the other hand, gives you the chance to save pretax money, which you can use to pay for medical expenses like your deductible, copays and coinsurance.
Some people prefer HSAs for the tax benefits, long-term savings and greater flexibility when it comes to spending. For example, you can pay for virtually any medical treatment with an HSA. Gap health plans often exclude certain services. They also usually come with their own deductibles and out-of-pocket costs.
When to choose gap insurance
Gap health insurance is good for consumers who want immediate protection against large out-of-pocket costs. It can take a long time to adequately fund a health savings account (HSA). A gap health policy provides coverage right away.
Frequently asked questions
What is gap health insurance?
Gap health insurance helps pay for expenses like deductibles, coinsurance and copays for high-deductible health plans (HDHPs). Gap plans make HDHPs more affordable and protect you against high out-of-pocket medical expenses.
What does gap health insurance pay for?
Gap health insurance helps pay for your deductible. It also covers trips to the doctor’s office, medical devices, treatments and prescription medicine costs up to your out-of-pocket max.
However, since it’s not subject to Affordable Care Act (ACA) regulations, it may exclude some medical services, such as preventive care, lab work and mental health treatment. These medical services fall under the essential coverage categories that all major medical insurance policies must cover by law.
How much does gap health insurance cost?
Health gap insurance plans are typically cheap. Many medical gap policies cost less than $50 a month.
Sources
ValuePenguin used HealthCare.gov, IRS.gov and KFF to compile prices and information.
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