What is gap insurance?

The generic term "gap insurance" is used to describe any COBRA plan or non-COBRA alternative insurance that is used to cover a period of time between two group health insurance plans. More recently the same term is used to describe any supplemental insurance meant or cover items not covered by the primary insurance. For example, Medigap insurance is a term used to describe supplemental insurance to cover expenses not paid by Medicare. Since 2010, the term "gap insurance" means a plan meant to provide temporary transitional coverage until the next phase of health insurance reform becomes effective in January 2014. The state Pre-existing Condition Insurance Plans (PCIP), for example, are designed as gap insurance.

The majority of Americans are covered by employer-provided health insurance but, according to insurance industry reports, they will have are likely to experience an average of seven gaps in that employer-provided insurance coverage over their lifetime.

The most popular type of gap insurance is short term major medical insurance. The popularity is attributable to its low price and easy online issue procedure.

Other types of gap insurance include COBRA, welfare plans, state insurance plans, commercial individual medical insurance, mini-med insurance, accident insurance and emergency room insurance. This Web site groups the choices into two categories: COBRA and COBRA alternatives. Although not everyone is eligible for all types of coverage, everyone is eligible for at least some types of gap insurance.

revised 8/20/2012

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COBRA continuation coverage may provide temporary protection when changing jobs, going through a divorce or negotiating other life transitions. Choosing the right health insurance is crucial to protect your health and financial security.