The primary insurance is responsible for paying first on any claims and secondary insurance comes into play only if the primary insurance policy is unable to cover the entire claim.
Written by Chris Kissell
Chris Kissell
Chris Kissell is a Denver-based writer and editor with work featured on U.S. News & World Report, MSN Money, Fox Business, Forbes, Yahoo Finance, Money Talks News and more.
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John McCormick
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In a world where bigger is often better, does it make sense to supersize your medical coverage by carrying two health insurance plans?
Some policyholders have two health insurance plans rather than just one. For example, some seniors enrolled in Medicare also have a health insurance policy through an employer. Others may have coverage both through their own workplace and that of their spouse.
With dual health insurance plans, one is considered primary while the other is deemed secondary. In some situations, having two health insurance plans can reduce your out-of-pocket costs. But in other cases, the added premium payment and deductible might increase your overall health expenses and cause further complications.
Key Takeaways
Yes, you can have two health plans.
The most common example of carrying two health insurance plans is Medicare recipients, who also have a supplemental health insurance policy, Mordo says.
While that type of coverage is relatively common, other instances of dual health insurance plans are unusual, but do occur.
For example, it’s possible that a married couple could have two health insurance plans, even if each spouse is covered through a health insurance plan at their workplace.
You also might have two health insurance plans if you have health insurance through an employer, but also receive Medicaid or Medicare coverage. For example, some seniors may continue to work past the age of 65, in which case both Medicare and an employer-based plan can cover them.
“The reason why active employees stay on that employer plan is because of the prescription drug coverage,” Mordo says. “That’s a huge advantage.”
You might have two health insurance plans under the following circumstances:
When you have two forms of health insurance coverage, your primary insurance pays the first portion of the claim up to your coverage limits. Your secondary insurance may pick up some or all of the remaining costs.
However, you still might be responsible for some cost-sharing. For example, it’s a mistake to think your secondary insurance will kick in and cover the deductible attached to your primary insurance. Instead, you likely will be responsible for covering the deductible.
You also may be responsible for copay and coinsurance fees.
When you have primary and secondary health plans, the insurers use a framework to work together. That way, both health plans pay their fair share without paying more than 100% of the medical costs. This process is called coordination of benefits.
Coordination of benefits decides which plan pays first (the primary plan) and which pays second (the secondary plan).
Sometimes, a state or the federal government may set up the COB regulations. Large employer group plans create their own COB rules, too.
Here’s how COB works when there’s a health insurance claim:
When a member has double insurance, his or her individual circumstances determine which insurance is primary and which is secondary. Following are some examples of how this might work:
The primary insurance payer is the insurance company responsible for paying the claim first.
When you receive health care services, the primary payer pays your medical bills up to the coverage limits. The secondary payer then reviews the remaining bill and picks up its portion.
Coordination of benefits rules determines which of your insurance companies is the primary payer.
The secondary health insurance payer covers bills that the primary insurance payer didn’t cover.
After the primary insurer has paid its part of the insurance claim, the remainder of the claim moves on to the secondary insurer. The No. 2 insurer then pays its portion of the claim.
However, it is crucial to remember that the secondary insurance company may not pay the rest of your bills. You may be responsible for some health care costs.
Also, the primary and secondary insurance companies make sure they aren’t paying more than 100% of the overall bill. They do this through a process known as “coordination of benefits” that helps to make sure each company pays its own part of the claim without overlap.
For example, Jane is 66 and still works at a full-time job. She is enrolled in both Medicare and in her employer’s health insurance plan. Because she works for a bigger company, one with more than 20 employees, her employer-based plan is considered to be her primary insurer.
That means that if Jane has an operation, her primary insurer will get the claim first and pay out the portion that is its responsibility. After that, the claim will go to Medicare, which will pay out whatever remains up to Medicare’s responsibility.
Any portion of the bill not covered by the employer’s health insurance plan and Medicare would then be the patient’s responsibility.
Here is another example: Jim is a student who has coverage through his college and through his parents’ insurance plan. In this situation, the college plan is primary and would get the claim first. Whatever is left over from the claim then would move to his parents’ plan.
Coordination of benefits isn’t always standard. Plans can differ, so it’s vital to talk to your employer’s benefits department and health plan if you have two health plans.
That said, here are situations when you may have more than one health plan and which one would likely be the primary insurer and which would be secondary:
| Situation | Primary | Secondary |
|---|---|---|
| Married; both spouses have plans | Your employer | Your spouse’s employer |
| Child with two plans from married parents | Parent with earlier birthday in calendar year | Parent with later birthday |
| A child has divorced parents | Parent with custody | — |
| A child with own policy (from school or work) and still on parent’s health plan | Child’s plan | Parent’s plan |
| A child is married and on spouse’s and parent’s policies | Child’s spouse’s plan | Parent’s plan |
| A pregnant child on a parent’s plan | Child’s plan | — |
| Workers’ compensation and health insurance plan | Workers’ compensation | Health plan |
| COBRA and other insurance | Employer’s plan | COBRA |
| Medicare and a private health insurance plan | Medicare if employer has 100 or fewer employees; private insurer if more than 100 employees | Private insurer is 100 or fewer employees; Medicare if more than 100 employees |
| Veterans Administration (VA) and a private health insurance plan | Private insurer | — |
| Military coverage (TRICARE) and other health insurance | Other insurer | TRICARE except if other plan is Medicaid |
| Medicaid and other plan | Other insurer | Medicaid |
There are both advantages and disadvantages to carrying two health insurance plans:
When you have both primary and secondary insurance, each plan pays a portion of your medical bills. Your primary insurer is the one who pays first – up to the coverage limits. The secondary insurer then pays any remaining costs.
It’s important to understand how your particular insurance plans work together in order to get the most coverage.
Double insurance coverage occurs when two health insurance policies cover an individual. This can happen if an individual has both employer-sponsored health insurance and an individual health insurance policy or if an individual is covered by their spouse’s health insurance policy as well as their own.
While double coverage can provide some financial protection in an accident or illness, it can also lead to higher costs. You have to pay two premiums and two deductibles if you have two plans.
Determining which health plan is primary is straightforward: “If you are covered under an employer-based plan, that is primary,” Mordo says.
If you also were covered under a spouse’s plan, that would be secondary, he adds.
In certain situations, seniors who are 65 and still working may be covered under their employer’s plan and eligible for Medicare.
“Depending on the size of the employer, Medicare can be primary or Medicare can be secondary,” Mordo says.
If the employer has 20 or more employees, the employer’s health plan will be primary, and Medicare will be secondary.
If you carry two health insurance plans and have deductibles with each plan, you’re responsible for paying both of them when you make a claim.
In other words, don’t expect that if you pay a deductible on one plan, it will eliminate your obligation for the deductible on the other plan.
Typically not. If you have a deductible on one or both plans, you will need to pay those deductibles before your insurance reimburses you for care.
“Depending on the type of plan you have, there is not necessarily a pass-through or a honoring of a deductible from one plan design to the next,” Mordo says.
