Can You Have Two Health Insurance Plans? How Secondary Insurance Works
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The cost of health care in the U.S. is no easy task. Many people are looking to cut costs on health care and the average American is spending more than $13,000 every year on their health. A shrewd, and somewhat neglected, tip is to have two health insurance policies. This is all you need to know.
Key Takeaways
1. It is perfectly legal to have two health insurance plans at the same time. Many individuals and families carry dual coverage, which can lead to significant savings if they have substantial medical expenses.
2. The primary health insurance plan always pays first. After that, the secondary plan may cover some or all of the remaining eligible costs through coordination of benefits (COB).
3. When two plans overlap, the primary insurer is typically determined by factors such as the birthday rule, employment status, and dependent relationships.
4. Dual health insurance is often most beneficial for people with high healthcare costs. If your medical expenses are low, paying premiums for two plans may not be cost-effective.
5. Always verify your coordination of benefits (COB) rules with both insurance companies before assuming how your claims will be processed.
Yes, it is fully legal and more prevalent than people think to have dual coverage. Two million people in the United States have more than one plan in effect from their employers, from their spouses or even from their parents.
If two plans are in effect, it is through a process known as coordination of benefits. That way you don’t risk having to pay more than 100% of your actual medical expenses from either plan, reducing your financial risk during high cost medical events.
The answer lies in one word: coordination of benefits. If you get medical treatment, your main plan pays the earliest and ends up with the remaining amount. If there is a balance left over after your primary plan has covered it, including deductibles, copays or coinsurance, the excess goes to your secondary plan to cover.
For instance, if you have to go to the hospital and the price is a total of $4,000, but your primary health plan pays $2,800, then the balance of $1,200 will be covered by your secondary health plan. That plan may help you pay a significant amount of that balance, depending on how the plan is set up, and so you’ll have little out of pocket. There is one important tip that goes with all dual coverage scenarios: always maximise the total payout amount depending on your medical expenditures from both your plans.
Your main plan pays first, and any proceeds left over are paid to your secondary plan. When seeking care, it’s crucial to know which plan you’re covered by, because it can have a direct impact on how your bills will be handled and how much you will have to pay.
Primary insurance can handle each eligible claim depending on the insurance company’s benefit structure and ignores if you have other insurance policies in place. This is the plan most working adults have, because it is their employer’s plan.
Secondary insurance is provided after the primary insurance takes its cut. This can pay for any leftover expenses, such as deductibles, copays and coinsurance, which is where the actual savings come in for those who have a lot of medical expenses or complex needs. The primary plan is determined in line with rules that are standardized by the National
Yes, and certainly it’s good economic sense for many American families. Nearly half of all Americans get health coverage through an employer, and many of those also are eligible as dependents on their spouse’s or partner’s plan, according to the Kaiser Family Foundation.
Families with children under the age of five, people with chronic conditions, and people who are expecting large surgeries are likely to benefit the most. If you have a secondary plan, you are facing serious medical costs before your insurance company, just the type of coverage that makes having a secondary plan worthwhile.
There are benefits to having dual coverage such as lower out-of-pocket costs, but there are also drawbacks which add extra expenses and hassle. Only you will really know if it is helpful, based on your health care consumption and your monthly budget.
Benefits of dual coverage:
Paige Cerulli Paige Cerulli is a freelance content writer and journalist who specializes in personal finance topics. She graduated from Westfield State University and brings more than a decade of professional writing experience to the ConsumerCoverage team. Paige’s work has appeared in outlets including USA Today, Business Insider, and more.
