Can You Have Multiple Health Insurances?

It is possible to have more than one health insurance plan simultaneously. While this arrangement can offer comprehensive coverage, it involves specific rules and procedures to determine how benefits are paid. Understanding these guidelines helps manage medical costs and navigate the claims process effectively.

Common Reasons for Multiple Coverage

Individuals often have multiple health insurance policies due to various life circumstances or employment situations. A common scenario involves family coverage, such as when an individual is covered by their own employer’s health plan and also by a spouse’s employer-sponsored plan. Similarly, a child might be covered under the health plans of both parents, leading to dual coverage.

Another instance is when someone leaves a job and elects to continue health coverage through COBRA while also enrolling in a new employer’s health plan. This temporary overlap can result in two active policies. Individuals eligible for Medicare may also maintain employer-sponsored health coverage, either from their own current employment or through a spouse’s plan, creating a dual coverage situation.

Some individuals may have both private health insurance and government-sponsored programs like Medicaid, depending on specific eligibility requirements. While less common, it is also possible to hold two private health plans, perhaps through different professional affiliations or associations. Understanding how multiple plans interact to cover healthcare expenses is important.

How Coordination of Benefits Works

When an individual has multiple health insurance plans, a process called Coordination of Benefits (COB) determines which plan pays first. COB prevents overpayment, ensuring total benefits do not exceed 100% of the allowed medical expenses. Each health insurance policy designates one plan as the “primary payer” and the other as the “secondary payer.” The primary plan pays its benefits first, and the secondary plan may cover remaining eligible costs.

Several rules dictate which plan is primary and secondary. For children covered by both parents’ plans, the “Birthday Rule” generally applies; the parent whose birthday falls earlier in the calendar year has the primary plan. This rule considers only the month and day, not the year of birth. When one plan is associated with current employment and another is from a retired spouse or former employment, the plan from active employment is usually primary.

For individuals with COBRA coverage and a new employer-sponsored plan, the new employer plan typically acts as primary, with COBRA serving as secondary. If an individual is eligible for Medicare and has active employer-sponsored health coverage (their own or a spouse’s), the employer plan is usually primary if the employer has 20 or more employees. If the employer has fewer than 20 employees, Medicare typically pays first. Insurers also follow general Order of Benefits Determination (OBD) rules, which resolve payment priority when specific rules like the Birthday Rule do not apply.

Managing Costs and Claims with Multiple Plans

Having multiple health insurance plans can significantly impact how medical costs are managed and claims are processed. After the primary plan pays its benefits, the secondary plan may cover some or all remaining costs, including deductibles, copayments, or coinsurance amounts not covered by the primary plan. This can substantially reduce a patient’s out-of-pocket expenses. However, total reimbursement will not exceed the allowed amount for medical expenses, preventing financial gain.

While dual coverage can lower out-of-pocket costs, individuals must consider the combined cost of premiums for both plans. The financial benefit of reduced out-of-pocket expenses must be weighed against ongoing premium payments. The cost of two premiums might outweigh potential savings on deductibles and copayments, depending on healthcare utilization.

When submitting claims with multiple plans, the process generally involves informing both insurers about the other coverage. The healthcare provider will first submit the claim to the primary insurance company. Once the primary insurer processes the claim and issues an Explanation of Benefits (EOB), the remaining balance and EOB are sent to the secondary insurance company for review and potential payment.