As healthcare costs continue to rise, many people are looking for ways to save money without sacrificing essential medical coverage. One strategy that some individuals consider is obtaining multiple health insurance plans. But can you double up on health insurance? And if so, how does it work?
The Basics of Dual Coverage
Having two or more health insurance policies at the same time is known as “dual coverage” or “multiple coverage.” It might seem like a smart way to get additional protection and potentially reduce out-of-pocket expenses. However, before enrolling in multiple plans, it’s important to understand how coordination of benefits works. This refers to the process by which insurers determine their respective responsibilities for paying claims when an individual has dual coverage.
Coordination of Benefits
Coordination of benefits (COB) aims to make sure that no more than 100% of a healthcare expense gets covered – regardless of how many policies an individual may have. Under COB rules, one insurer serves as the primary payer; this means that they pay first up until their policy limits are reached. Afterward, any remaining balance gets paid by a secondary plan.
Some factors usually determine which plan pays first:
- Employment status: If an employee has coverage through both their employer and spouse’s employer-based group policy
- Birthday rule: The birthday rule comes into play when there are dependents under parents’ multi-level agreements
- Medicare/Medicaid status: Depending on eligibility and age.
Pros and Cons of Dual Coverage
Having multiple insurance policies provides extra peace-of-mind about medical costs but comes with drawbacks:
- Potentially lower out-of-pocket expenses
- May increase your access-to-care options
- Higher premiums
- Increased deductibles
- Complicated claims processing procedures
It is worth considering whether having more than one policy would be beneficial, and whether it’s worth paying the extra cost of additional premiums.
Secondary Health Insurance: What Is It?
Secondary health insurance is the second health plan when you have more than one health insurance plan. Secondary health insurance can be a way to improve coverage, for instance adding a second health plan may provide access to doctors outside of the network in the first plan.
When you have multiple health insurance plans, the companies work together to determine which plan pays first and which one pays second. This process is called coordination of benefits, which dictates primary and secondary insurance. The primary and secondary insurer varies by type of health insurance, and your state and employer can also influence that process.
How Does Secondary Insurance Work?
The primary and secondary insurance process works this way:
- The health care provider files the claim with the primary health insurance company. That health insurer reviews the claim and pays according to the plan’s benefits and coverage.
- The secondary health insurance then reviews the claim, what’s been paid by the primary insurer and contributes its portion of payment based on its benefits and coverage.
- The health care provider bills you for what’s remaining after the two insurance companies pay their share.
Who Can Have Secondary Insurance?
Secondary health insurance is available to anyone eligible for multiple health insurance plans. Some examples of when you may be eligible for multiple health insurance plans are:
- You’re eligible for health insurance through your job and your spouse’s employer-sponsored health insurance plan.
- You’re under 26 and qualify for a health plan through your employer and you’re also on your parents’ health plan.
- You have both health insurance and a workers compensation insurance claim.
- You have a private health insurance plan and are eligible for coverage through a veterans administration (VA) plan, Medicare, Medicaid or another type of coverage.
What Does Secondary Insurance Not Cover?
What a secondary insurance plan may not cover varies by the specific health plan. That’s why it’s critical to understand what each health plan covers and what it excludes. You also want to ensure you get care from in-network providers only. Some health plans like health maintenance organization (HMO) and exclusive provider organization (EPO) plans don’t typically cover any out-of-network services unless it’s an emergency.
Is Secondary Insurance Worth It?
Secondary health insurance can help reduce out-of-pocket costs, but having multiple health plans isn’t always a great situation. Paying two premiums and deductibles and juggling two provider networks and health plan benefits may be costly and a health insurance headache. On the flip side, a secondary health insurance plan with little to no health insurance premiums, a low health insurance deductible, generous coinsurance rates and a wide provider network may be worth it.
While dual coverage might seem like a smart way to get additional protection, it’s not always necessary. Carefully evaluating your individual insurance needs should help determine if multiple policies could provide sufficient benefits. Remember that in some cases coordination of benefits can lead to confusion and difficult claim processing procedures. In the end, every individual should determine based on their unique health circumstances if double health insurance is worth pursuing.
Can I have more than one health insurance plan at a time? Yes, it is possible to have two or more health insurance policies at the same time. This is called dual coverage, double coverage, or multiple coverage plans. Dual coverage may occur when two policies cover the same person for different reasons (such as primary vs secondary), or when each policy covers different aspects of healthcare expenses (such as medical and dental).
Does having multiple health insurance policies mean I get double benefits? No, having multiple coverages does not automatically mean you will receive twice the benefits or that all your healthcare costs will be completely covered by both plans. Instead, the coordination of benefits clause in your policy specifies how much each insurer pays based on their respective deductibles and co-insurance rates.
What are some advantages of having two health insurance policies? Having dual insurances can provide additional financial protection against unexpected medical bills that exceed one plan’s limits. It also allows patients to choose from a broader range of service providers because certain doctors or hospitals may only accept specific types of insurance plans. However, it’s important to carefully review terms and premiums associated with each policy before choosing dual coverage to ensure cost savings outweigh extra fees associated with carrying an additional plan.