Can I Have More Than One Medical Insurance?

Medical insurance is an important financial tool for managing healthcare expenses, which can be substantial. It helps individuals and families access necessary medical services without incurring the full, direct cost of care. Understanding the various aspects of health coverage, including how different policies might interact, is valuable for effective financial planning.

Is It Possible and Why You Might

It is common for an individual to have more than one medical insurance policy. This dual coverage is legal and often arises from various life circumstances rather than a deliberate choice to acquire multiple plans. Approximately 13% of the population, or about 43 million people, have more than one medical insurance plan.

One common scenario involves individuals covered by their own employer’s health plan while also being listed as a dependent on a spouse’s plan. Students under the age of 26 may retain coverage under their parents’ policy while simultaneously being enrolled in a university-sponsored plan or their own employer’s plan. Similarly, children of divorced parents might be covered by both parents’ separate insurance policies.

Individuals transitioning between jobs may find themselves with overlapping coverage, such as COBRA from a former employer and a new plan from their current employer. For those aged 65 and older, having Medicare along with a supplemental employer plan, retiree coverage, or Medicaid can also result in multiple policies. While specialized plans like vision or dental insurance often operate independently, the focus here is on major medical coverage overlaps.

How Multiple Policies Interact

When an individual has more than one health insurance policy, a process known as Coordination of Benefits (COB) determines how the plans work together to pay for medical expenses. The primary goal of COB is to prevent individuals from receiving more than 100% of the cost of medical care. Insurance companies use specific rules to establish which plan is primary and which is secondary.

The primary insurer is the plan that pays first, covering costs up to its policy limits, including deductibles, copayments, and coinsurance. After the primary plan processes the claim, any remaining eligible balance is then sent to the secondary insurer. The secondary plan may then cover some or all of the remaining costs, depending on its terms and coverage limits.

Several common rules dictate which plan assumes the primary payer role. If an individual has coverage through their own employer and is also a dependent on a spouse’s plan, their own employer-sponsored plan is typically primary. The spouse’s plan would then serve as the secondary coverage.

For dependent children covered by both parents’ health plans, the “birthday rule” typically applies. This rule designates the plan of the parent whose birthday falls earlier in the calendar year as the primary insurer. The birth year is not considered, only the month and day. If both parents share the same birthday, the plan that has covered the individual for a longer duration usually becomes primary.

Medicare’s role as a primary or secondary payer depends on specific circumstances, particularly employment status. For individuals aged 65 or older who are still working, their employer’s health plan is generally primary if the employer has 20 or more employees. In this situation, Medicare would be secondary. If the employer has fewer than 20 employees, or if the individual is retired, Medicare typically acts as the primary payer. Medicaid, when combined with other insurance, is almost always the secondary payer.

Navigating Claims and Costs

Understanding the practical steps for filing claims with multiple insurance policies can help streamline the reimbursement process. Typically, the primary insurer must be billed first for medical services. Once the primary plan has processed the claim and paid its portion, an Explanation of Benefits (EOB) statement is issued. This EOB details what the primary insurer covered and any remaining balance.

The EOB from the primary insurer, along with the original medical bills, is then submitted to the secondary insurer for consideration. The secondary plan reviews the claim and may cover some or all of the remaining eligible costs, but only up to its own coverage limits. It is important to remember that having multiple plans does not guarantee zero out-of-pocket costs.

While secondary insurance can significantly reduce financial responsibility, individuals may still be responsible for deductibles, copayments, and coinsurance under one or both plans. For instance, a secondary plan generally does not cover the deductible of the primary plan; these are typically separate obligations.

A significant consideration when maintaining multiple policies is the cost of premiums. Individuals should carefully weigh these ongoing costs against potential savings on out-of-pocket expenses for medical care.

Administrative complexities can also arise from managing multiple policies. This includes tracking EOBs from each insurer and communicating effectively with both providers regarding claims. Before committing to multiple plans, it is advisable to contact both insurance providers to understand their specific COB rules and how they might impact overall costs and coverage.