Can You Have Two Health Insurance Plans?

It is permissible to have more than one health insurance plan. Securing additional coverage, often referred to as secondary insurance, is a common practice. Dual coverage is legal and can offer more comprehensive protection against medical expenses. Understanding how these multiple plans interact is important for effectively managing healthcare costs.

Possibility of Multiple Health Insurance Plans

Approximately 20 million Americans are projected to have more than one health insurance plan in 2025. This situation arises from various personal and employment circumstances. Dual coverage does not imply that medical expenses will be covered twice. Instead, one plan acts as the primary insurer, and the other as the secondary, working together through Coordination of Benefits (COB) to cover healthcare costs. Having two plans can offer more comprehensive coverage and greater protection against the loss of coverage if one plan is discontinued.

Common Scenarios for Dual Coverage

A frequent situation involves married couples where each spouse has an employer-sponsored health plan and is also covered as a dependent on the other’s plan. This allows for individual coverage through their own workplace plan and dependent coverage through their spouse’s.

Dependent children often have dual coverage, especially if both parents carry separate health insurance plans. In cases of divorced parents, a child might be covered by both parents’ plans, or even a stepparent’s plan. Young adults under the age of 26 can remain on a parent’s health plan while also obtaining their own coverage through an employer or a student medical plan.

Medicare beneficiaries have additional private insurance, a Medigap policy, or a Medicare Advantage plan to supplement their government coverage. Individuals who qualify for Medicaid may also have private insurance, with Medicaid acting as the secondary plan to supplement their primary coverage. COBRA coverage, which allows continued health benefits after leaving a job, can overlap with a new employer’s plan during a transition period. Veterans Affairs (VA) benefits can also exist concurrently with private health insurance, providing another layer of coverage.

Coordination of Benefits

Coordination of Benefits (COB) is the process insurers use to determine which plan pays first when an individual has more than one health insurance policy. This process is designed to prevent overpayment and ensure that the combined benefits from all plans do not exceed the total cost of medical services. Under COB, one plan is designated as the “primary” insurer, which pays first, and the other as the “secondary” insurer, which covers remaining eligible costs.

The primary plan pays claims according to its policy rules, including deductibles, copayments, and coinsurance. Once the primary insurer has processed the claim, the secondary plan then reviews the remaining balance and may cover some or all of the costs not paid by the primary plan, depending on its terms. It is important to note that the secondary plan does not always cover everything the primary plan does not, and individuals may still have out-of-pocket expenses.

For dependent children covered by both parents’ plans, the “birthday rule” applies. The plan of the parent whose birthday month and day occur earlier in the calendar year is considered primary, regardless of the birth year. If a person has coverage through their own employer and also as a dependent on a spouse’s plan, their own employer-sponsored plan is primary.

For Medicare beneficiaries, the primary payer depends on employment status and employer size. If an individual aged 65 or older is still working and covered by an employer’s group health plan with 20 or more employees, the employer’s plan is primary, and Medicare is secondary. If the employer has fewer than 20 employees, Medicare acts as the primary payer. For retirees with coverage from a former employer, Medicare is primary, and the retiree plan is secondary. Medicaid serves as the payer of last resort, meaning it is secondary to any other health insurance coverage.

Managing Multiple Plans

Informing both insurance companies about the existence of the other coverage is important. This ensures that the insurers can properly apply Coordination of Benefits rules and process claims accurately.

After receiving medical services, individuals should expect to receive an Explanation of Benefits (EOB) from their primary insurer. This document details how the primary plan processed the claim, including what was paid and what remains as patient responsibility. Review each EOB for accuracy and to understand the breakdown of costs.

Once the primary insurer has processed the claim and issued its EOB, any remaining balance can then be submitted to the secondary insurer for consideration. This involves sending the secondary insurer a copy of the primary EOB along with the claim. Keeping organized records of all medical expenses, claims, and EOBs from both insurers is beneficial for tracking payments and addressing any discrepancies. If COB was not initially applied correctly, it is possible to receive refunds for overpayments after the plans have coordinated.