What is medigap?

Medicare, which began in 1965, was never intended to completely cover healthcare expenses. But with Medicare now paying for only about half of all healthcare costs for people age 65 and over, there's clearly a need for additional coverage to pay for what Medicare doesn't.

Enter medigap, a set of government-regulated supplemental private health insurance plans. Medigap is designed to bridge the gap between what Medicare pays and what people wind up having to pay out of their own pockets -- like the $1,024 Medicare deductible for hospitalization and the 20 percent Medicare copayments for doctor visits, just to name two of the most prominent.

Medigap policies (which Congress standardized in 1992 and revised in 2006) are issued through private insurance companies. Although the details of the policies -- and their premiums -- vary from company to company, each insurance company that issues them may offer only the same standard plans with the same basic benefits.

Here's what you need to know about medigap when evaluating whether it makes sense for you or someone you're caring for.