Can I Have Two Health Insurance Policies?

It is permissible to have dual health insurance coverage, a situation becoming increasingly common. Many individuals hold multiple policies to enhance benefits or provide a safety net. This involves a structured process to determine how each plan contributes to medical expenses.

Scenarios for Multiple Policies

Individuals often find themselves with more than one health insurance policy due to various life events or employment situations. A frequent scenario involves spousal coverage, where both partners have employer-sponsored plans and choose to be covered under each other’s policies. This can also occur when a young adult, still eligible to be on a parent’s plan until age 26, obtains their own employer-sponsored health insurance. In such cases, the individual is covered by both their own employer’s plan and their parent’s plan.

Another common situation arises for individuals eligible for Medicare, the federal health insurance program for those aged 65 or older and certain younger people with disabilities. Many Medicare beneficiaries choose to supplement their federal coverage with a private plan, such as a Medicare Advantage plan or a Medigap policy, to cover costs not fully paid by Original Medicare.

Additionally, during periods of employment transition, individuals might elect Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage from a former employer while simultaneously enrolling in a new employer’s plan. This overlapping coverage ensures continuity of care during a change in employment. Individuals working multiple part-time jobs, each offering health benefits, may also find themselves with more than one active health insurance policy.

Coordination of Benefits

When an individual holds two or more health insurance policies, Coordination of Benefits (COB) determines the order in which each plan pays for covered medical services. The primary plan processes the claim first and pays its portion. The claim is then submitted to the secondary plan, which may cover remaining eligible expenses.

Rules for determining which plan is primary and which is secondary are generally consistent across the industry. For dependent children covered by both parents’ plans, the “birthday rule” is commonly applied: the plan of the parent whose birthday falls earlier in the calendar year (month and day only) is considered primary. If a person has their own employer-sponsored plan and is also covered as a dependent on a spouse’s or parent’s plan, their own employer plan is typically primary.

For those with Medicare and other coverage, specific rules apply; for instance, if an individual is over 65 and actively working for an employer with 20 or more employees, the employer’s plan is usually primary, and Medicare is secondary. Conversely, if the employer has fewer than 20 employees, Medicare often becomes the primary payer. If COBRA coverage overlaps with an active employer plan, the active plan is usually primary.

Understanding Financial Responsibilities with Multiple Policies

Having multiple health insurance policies can influence an individual’s financial obligations, potentially reducing out-of-pocket expenses. While the primary insurer processes a claim and pays according to its terms, the secondary insurer may then contribute to the remaining costs, including deductibles, copayments, and coinsurance. This means that while a primary plan might require a deductible to be met before it pays, the secondary plan could then apply payments towards that deductible or other cost-sharing amounts that the primary plan did not cover.

Even with dual coverage, receiving 100% reimbursement for medical expenses is not guaranteed. The combined payments from both plans will generally not exceed the total cost of the services rendered. Each policy carries its own premium, meaning individuals with dual coverage often pay two separate monthly premiums. While secondary insurance can significantly lower out-of-pocket costs, it does not necessarily eliminate all expenses.