Can You Carry Two Health Insurance Plans?

It is permissible to carry two health insurance plans simultaneously, an arrangement often referred to as dual coverage. Many individuals find themselves with access to more than one health insurance policy. This article explores common scenarios leading to dual coverage, explains how these plans work together, and outlines important financial and practical aspects to consider.

Understanding Multiple Health Insurance Coverage

Many people have more than one health insurance plan due to various life circumstances. It is acceptable to maintain dual health insurance coverage, a situation not uncommon for millions of Americans.

One frequent scenario involves individuals covered by their own employer’s plan while also eligible for coverage under a spouse’s employer-sponsored plan. Young adults often maintain coverage under a parent’s health plan until age 26, even if they have access to their own employer’s benefits.

Another common instance of dual coverage occurs when individuals qualify for Medicare and also possess a supplemental plan, such as a Medigap policy, an employer-sponsored retiree plan, or Medicaid. During job transitions, COBRA coverage might overlap with a new employer’s plan for a temporary period. Children of divorced parents may also be covered under separate health insurance policies from each parent.

How Coordination of Benefits Works

When an individual has two health insurance plans, they do not receive double benefits. Instead, the plans work together through Coordination of Benefits (COB). COB rules determine which plan is the “primary” insurer and which is the “secondary” insurer, ensuring combined payments do not exceed the total cost of the medical service.

The primary plan processes the claim first and pays its share of the covered amount according to its policy rules. After the primary insurer pays, the remaining balance, along with the primary plan’s Explanation of Benefits (EOB), is submitted to the secondary insurer. The secondary plan then reviews the claim and may cover some or all of the remaining costs, such as deductibles, copays, or coinsurance, up to its own coverage limits.

Rules determine which plan is primary. For dependent children covered by both parents’ plans, the “Birthday Rule” generally applies. Under this rule, the plan of the parent whose birthday month and day occurs earlier in the calendar year is considered primary.

When an individual has coverage through their employer and is also covered as a dependent under a spouse’s plan, their own employer coverage is usually primary. If COBRA coverage overlaps with an active employer’s plan, the active plan is primary. For individuals with Medicare and employer-sponsored health coverage, Medicare’s primary or secondary status depends on factors like employer size and the individual’s working status. For instance, if an employer has 20 or more employees and the individual is still working, the employer plan is generally primary over Medicare. In scenarios involving Medicare and Medicaid, Medicare is primary, and Medicaid is secondary.

Financial and Practical Considerations

Having two health insurance plans offers several potential advantages, but also introduces complexities and financial considerations. One significant benefit is the potential for lower out-of-pocket costs, as the secondary plan may help cover expenses like deductibles, copays, and coinsurance not fully covered by the primary plan. Dual coverage can also provide more comprehensive benefits or broader access to healthcare providers if the plans have different networks or cover different services. This can be useful if one plan has limitations on specific treatments or medications.

Dual coverage does not mean receiving double payment for services; both plans coordinate to ensure total reimbursement does not exceed 100% of the medical bill. A primary drawback is the increased premium costs associated with paying for two separate policies. The added cost of a second plan may sometimes outweigh the financial benefits.

Managing two plans can also lead to administrative complexities and additional paperwork. Understanding the nuances of each plan’s benefits, coordinating claims submission, and navigating different provider networks can be time-consuming. Individuals should carefully review the policy documents for both plans to understand their specific Coordination of Benefits rules. It is advisable to consider individual healthcare needs and financial situations, and to contact insurance providers directly for personalized guidance before making decisions about dual coverage.