With healthcare costs and insurance premiums constantly on the rise a lot of families are wondering if it might be a good idea to carry two insurance plans.
It’s a great way to ensure that specific family members with special needs or unique medical conditions have all the coverage they need.
While it might sound like more work having two individual or family health insurance plans, having a second health insurance plan can help you cover some of your insurance expenses.
Though this might have you rightly wondering if it’s legal for a person to carry two insurance plans?
If so, which one is considered to be the “Primary” insurance plan for determining the level of coverage and costs?
The good news is that it’s perfectly legal for a person to carry a secondary health insurance plan. Though the fine-point details of which plan is considered to be the primary is a little bit complicated.
In this article, we’ll take a deep dive into the details to help you understand the benefits of a secondary insurance plan as well as how primary and secondary insurance plans operate.
The Premium Difference Between Primary and Secondary Insurance Plans
The initial concern with carrying two health plans for you or another family member is that you’ll likely have to bear the cost of two monthly premiums as well as potentially two deductibles. So you’ll need to shop wisely when considering getting a secondary short-term or long-term health insurance plan.
Ideally, you want the secondary insurance plan to be geared toward specialty needs and therapeutic services that aren’t covered, or carry little coverage in the first plan.
Can a Secondary Insurance Plan Help With Deductibles?
Not all insurance carriers recognize secondary plans when it comes to responsibilities for deductibles. If you’re likely to spend through a deductible early in the enrollment year, and you’re prepared for that, then it’s not as big of a factor. Otherwise, you’ll likely have to meet the financial responsibilities for both plans’ deductibles.
What Are the Benefits of Carrying Two Health Plans?
Carrying two health plans isn’t going to be beneficial for everyone. Though some people can benefit from having a primary and secondary health plan. Not to mention times when a married couple both have overlapping coverage from each of their employer’s healthcare coverage.
A secondary health plan might also make sense if you are under 26 years of age, with divorced parents, and each of your parents lists you as a “Dependent” under their own separate health plans.
Carrying a secondary health plan might also make sense if you are under 26, and married, while still being covered by your spouse’s plan as well as your parents’ plan. In a case like this, there might be benefits from one plan that overlaps or is superior to the same coverage offered by the first plan.
Most families with an individual who has two health insurance plans choose the secondary plan to help cover the cost of specialty services. This might be a primary plan that covers everyone in the family, then a secondary plan for a single family member who might need ABA therapy to help with autism spectrum disorder.
How Do Two Health Insurance Plans Affect Coverage?
Simply carrying two health insurance plans doesn’t always mean you are fully covered two times. Just because you might happen to go to the doctor’s office twice doesn’t mean you’ll be reimbursed twice. The same holds true with purchasing prescription medications. Carrying two healthcare plans doesn’t necessarily mean that you are going to get reimbursed twice for that medication.
Most of the time, with two health insurance plans there is some type of “Coordination of Benefits” written into the policy’s provision. This is a specific clause that outlines the order in which your health insurance policies payout.
Most health insurance companies don’t want to incentivize people to carry multiple insurance plans, which could open the door for someone to fraudulently try to get reimbursed multiple times for the same visit. Instead, this Coordination of Benefits language in the policy specifies which plan pays first, reduces the duplication of benefits, and increases the efficiency with which claims are processed.
How Does The Coordination of Benefits Provision Work?
The Coordination of Benefits Provision in most health insurance plans determines which plan is considered the primary and which is secondary.
This means the “Primary” insurance pays first and will continue to pay until it reaches the coverage limits. You may owe cost sharing.
At that point, the secondary insurance plan will take over and cover any additional health care costs. Depending on the language in both policies the secondary insurance might cover part or all of the remaining cost.
Though it’s important to understand that both the primary and secondary health insurance plans will only cover up to plan limits. Once the secondary insurance has paid its share, you may be responsible for any remaining amount that wasn’t covered. Depending on what those coverage limits are, you might still have leftover out-of-pocket medical costs.
This is why it’s so important to take the time to shop and compare health insurance plans that can help. Make sure to compare the cost of premiums, deductibles, and co-payments side by side. You also need to factor in any specialty services that you or another family member might need.
Which Health Insurance Plan Is Considered to be the Primary?
The specifics of the situation will factor heavily in determining primary versus secondary insurance, and which one pays first.
Let’s say you have a child and both you and your co-parent have health insurance plans that cover that child as part of their respective family plan. In a case like this, the Primary Insurance policy is based on something called “The Birthday Rule” which states that the primary coverage will come from the parent whose birthday comes first in the calendar year. Though this is based on the calendar year. It’s not based on which parent is older.
Anytime you make a health insurance claim, your primary insurance plan will act as if you had no secondary plan and provide you with your benefits. At that point, the secondary insurance plan kicks in and covers the rest of the cost if it’s covered and necessary.
How Do Two Health Insurance Plans Affect Out-of-Pocket Costs?
A person who carries multiple health insurance policies usually has to pay any applicable premiums and deductibles for each of the health plans. This means that your secondary insurance won’t have coverage to pay for your primary policy’s deductible. The same out-of-pocket costs for things like co-pays and prescriptions still apply.
For example, you might have a Preferred Provider Organization plan as your primary policy. This might have rules for what providers are considered to be in the network. This might mean you have additional costs if you see an out-of-network provider who isn’t covered by your plan. Depending on the language in the policy, your secondary insurance might not cover the costs if you didn’t follow your primary plan’s rules.