Medicare gap coverage is a type of insurance that fills in the “hole” in Medicare.
This hole, which is known as the Medicare donut hole, occurs when a senior citizen has spent a certain amount of money on prescription drugs for the year. This amount varies from year to year but is usually around $3,000. The donut hole kicks in when a senior citizen has spent that amount and is then responsible for 100% of their prescriptions for the remainder of the year. This coverage is designed to cover any expenses that would fall into this gap (hence “gap coverage”).