Haris Ashley
Having two health insurance plans is legal and can be beneficial for many reasons. In 2023, about 43 million people in the US had multiple health plans. The most common example of carrying two health insurance plans is when Medicare recipients also have a supplemental health insurance policy. Other instances of dual health insurance include having employer-sponsored coverage while also being on a spouse's plan, or combining Medicare with a private policy. While having two plans can reduce out-of-pocket costs, it doesn't guarantee full coverage of all medical expenses. Deductibles, copays, and coverage limitations still apply, and the secondary plan only pays after the primary plan has processed the claim. Coordination of benefits (COB) is the process that decides which insurance pays for a claim first.
| Characteristics | Values |
|---|---|
| Number of people with 2 medical insurance plans | 43 million in 2021, 20 million in 2025 (US) |
| Reasons for having 2 plans | Employer-sponsored coverage and spouse's plan, Medicare and private policy, Medicaid and private policy, divorced parents with separate insurance plans |
| Primary insurance | The main insurance policy that covers medical care first. |
| Secondary insurance | Covers costs that the primary plan doesn't cover, but only after the primary insurance reaches its coverage limits. |
| Benefits of 2 plans | Reduced out-of-pocket costs, broader coverage options, no gaps in coverage, greater benefits if plans are complementary |
| Drawbacks of 2 plans | Higher premiums and deductibles, coordination of benefits can be complex and time-consuming, possible disputes over which plan should pay for a service |
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What You'll Learn
Primary and secondary insurance
When you have two health insurance plans, one is considered the primary payer, while the other is deemed the secondary payer. The primary payer handles the first portion of the claim and then sends the rest to the secondary payer. The primary plan is your main insurance policy and will cover your medical care first, for example, when you see a doctor or need to buy prescription drugs. With a primary plan, you may owe cost-sharing fees, such as copayments or coinsurance, and you’ll also likely have an annual deductible and an out-of-pocket maximum.
The secondary payer then reviews the remaining bill and picks up its portion. The secondary insurance plan typically only kicks in after the primary insurance reaches its coverage limits. If there’s anything left to pay after the primary insurer covers its portion of the healthcare expenses, the secondary coverage will take effect. However, it is important to note that the secondary insurance company may not pay the rest of your bills, and you may be responsible for some healthcare costs.
There are several scenarios in which an individual might have two health insurance plans. For example, seniors enrolled in Medicare may also have a health insurance policy through their employer. Similarly, an individual may have coverage through their workplace and their spouse. In other cases, an individual may qualify for Medicaid but also have their own insurance plan. In this case, Medicaid supplements the individual's coverage.
Having two health insurance plans can offer several benefits. For instance, dual coverage can help reduce out-of-pocket medical costs, especially if significant healthcare expenses are expected. Additionally, if one of the health insurance policies lapses, the other plan will ensure continuous coverage. Furthermore, having two plans can provide more comprehensive coverage, filling in gaps in the primary plan.
However, there are also potential drawbacks to consider. Having two health insurance plans does not necessarily mean that you will be fully covered twice. Instead, one policy will be the primary plan, and the other will be secondary health coverage. You may still be responsible for two monthly premiums and two deductibles, which could increase overall health expenses. Therefore, it is important to carefully consider your situation and the potential pros and cons before deciding to obtain a second health insurance plan.
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Reducing out-of-pocket costs
Having two health insurance plans can help reduce out-of-pocket costs, but it doesn't guarantee that you won't have any out-of-pocket expenses. The effectiveness of dual coverage depends on the terms of the policies, deductibles, and coordination rules.
If you have two complementary plans that cover different areas of your medical needs, you can reduce your out-of-pocket expenses. For example, if your primary plan doesn't cover many hospital costs, a secondary hospital care insurance plan may be beneficial.
The secondary plan usually covers the remaining costs after the primary plan has paid its share. This can include copayments or additional costs not covered by the primary insurance. However, neither plan will cover the cost of a service that is not covered under their respective plans. Therefore, it is essential to understand how the coordination of benefits works to avoid unexpected costs.
Having dual coverage can also help fill gaps in primary coverage. If one plan lapses, you will still have coverage through the second plan. Additionally, if you have coverage through your spouse or parents, in addition to your own plan, you don't have to worry about losing health insurance if you lose your job.
If your employer offers a Health Reimbursement Arrangement (HRA), you may be able to get reimbursed for qualifying out-of-pocket medical expenses, up to a set monthly allowance. This can include insurance premiums, deductibles, copays, and coinsurance fees.
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Gaps in primary coverage
There are several ways to address gaps in primary coverage. One way is to have a secondary insurance plan that targets the specific areas where your primary coverage is lacking. For example, if your primary plan does not cover many hospital costs, you could take out a secondary hospital care insurance plan. This type of plan may cover you for unexpected illnesses such as a heart attack with a cash payment.
Another option is to take out a gap insurance plan. These are not considered qualifying coverage by the Affordable Care Act (ACA) and are not suitable as a replacement for primary health insurance. Instead, they are used as a supplementary insurance policy to cover medical expenses before the insured meets their deductible. Gap insurance can be a good option for employees with extensive or ongoing medical issues and high out-of-pocket costs. It can also help employers by saving them 10-20% on their group medical premium.
If you are covered by two health insurance plans, it is important to understand the coordination of benefits (COB). This is the process that decides which insurance pays for a claim first. Your primary plan is your main insurance policy and will cover your medical care first, up to its coverage limits. Your secondary insurance plan will then kick in and cover any remaining costs, up to its own coverage limits.
In some cases, having two health insurance plans can help to reduce your out-of-pocket costs. However, it is important to carefully consider your situation and the specifics of each plan, as you may also end up paying two monthly premiums and two deductibles.
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Multiple health plans
When an individual has multiple health plans, one plan is designated as the primary insurance, while the other is the secondary insurance. The primary plan is the individual's main insurance policy and will cover their medical care first. The primary insurer will cover bills up to its coverage limits, and the individual may owe cost-sharing fees such as copayments or coinsurance. The secondary insurance plan typically kicks in after the primary insurance reaches its coverage limits and will cover any remaining expenses. However, it is important to note that the secondary insurance company may not pay the remaining bills, and the individual may still be responsible for out-of-pocket costs.
There are various scenarios in which an individual may have multiple health plans. For example, a married couple may both have health insurance through their respective employers and be listed as dependents on each other's plans. In this case, one plan will be considered the primary plan, usually the one provided by the employer, while the other will be the secondary plan. Another example is a student under the age of 26 who has their own health insurance plan but is still a dependent on their parent's plan. Children of divorced parents may also have separate health insurance policies from each parent. Additionally, an individual may supplement their private health insurance plan with a government program such as Medicaid or Medicare.
Having multiple health plans can offer several advantages, such as reducing out-of-pocket costs, especially for significant medical expenses. If the secondary plan covers costs that the primary plan does not, individuals can save significantly. Multiple health plans can also help fill gaps in coverage and provide broader coverage options. For instance, if an individual's primary plan does not cover hospital costs, they may benefit from a secondary hospital care insurance plan.
However, there are also potential drawbacks to having multiple health plans. Managing dual coverage can be complex, and individuals may need to carefully coordinate their benefits to avoid claim denials or disputes. Additionally, having two plans does not guarantee full coverage of all medical expenses, as deductibles, copays, and coverage limitations still apply. Furthermore, having two separate premium and deductible responsibilities can add up over time and may outweigh the benefits of multiple insurance plans.
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Coordination of benefits
The primary plan is your main insurance policy that will cover your medical care first. For example, when you see the doctor or need to buy prescription drugs, your primary insurer will cover the bills up to its coverage limits. With a primary plan, you may owe cost-sharing fees, such as copayments or coinsurance. You’ll also likely have an annual deductible and an out-of-pocket maximum. Your secondary insurance plan typically only kicks in after your primary insurance reaches its coverage limits. If there’s anything left to pay after your primary insurer covers its portion of your healthcare expenses, your additional coverage will take effect.
There are a few different types of COB coverages:
- Carve out: The amount your primary plan paid is deducted from how much your primary plan can pay.
- Non-duplication: If the primary health insurance plan paid an amount that is equal to or more than what the secondary plan would pay, then the secondary plan does not pay out at all.
- Traditional: Your health insurance plans combined can cover up to 100% of your medical expenses.
It is important to note that having two health insurance plans does not necessarily mean that you will be fully covered twice. For example, if you go to the doctor twice, this doesn’t mean you are going to get reimbursed twice. You might still owe out-of-pocket costs at the end.
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Frequently asked questions
Having two medical insurances can help to reduce out-of-pocket costs, fill gaps in primary coverage, or provide access to a broader network of healthcare providers. It can also provide greater financial security if one becomes unemployed and loses one of their insurance plans.
Coordination of benefits (COB) is the process that decides which insurance pays for a claim first. It is important to understand the difference between primary and secondary insurance before securing two health plans. When you have two insurance plans, you are required to file a coordination of benefits form with both of them to let them know about each other.
Common scenarios include having employer-sponsored coverage while also being on a spouse's plan, or combining Medicare with a private policy. A person under the age of 26 may have their own health insurance plan and remain a dependent on their parent's plan.
