Final answer:
The private insurance purchased to cover the unpaid amounts in Medicare coverage is known as Medigap. It helps manage expenses such as co-payments, deductibles, and is sold by private companies. This insurance is particularly important for the elderly, who are prone to face gaps in their Medicare coverage.
Step-by-step explanation:
The term for private insurance that beneficiaries may purchase to fill in some of the gaps not covered by Medicare is known as Medigap. This type of insurance helps to cover out-of-pocket costs such as co-payments, deductibles, and other expenses not covered by Medicare Part A (hospital insurance) and Part B (medical insurance). Medigap plans are sold by private insurance companies and can greatly assist individuals in managing healthcare costs that are not covered by Medicare.
Medicare Part B is an optional program for which participants pay a monthly fee along with deductible charges and copayments, and it addresses healthcare costs outside of hospital stays, including physician services, medical tests, and outpatient visits. The government subsidizes about three-fourths of the total costs for this coverage. On the other hand, options like employment-based insurance and direct-purchase insurance are other forms of private insurance which can provide additional coverage depending on individual circumstances.
However, due to high costs and the complex health needs of certain populations, government-funded health programs like Medicare and Medicaid exist to provide insurance coverage to those over age 65 and those with low incomes, respectively. Even with Medicare, beneficiaries often find gaps in coverage that can lead to significant out-of-pocket expenses. Thus, Medigap insurance plays a crucial role in making healthcare costs more manageable for the elderly.