Can You Have Two Health Insurance Policies in California?

Having more than one health insurance policy is generally possible and can occur in various situations. This arrangement allows individuals to potentially broaden their healthcare coverage. Many people find themselves with multiple health plans due to different life circumstances, such as coverage through a spouse, an employer, or government programs like Medicare. The interaction between these policies involves established rules to ensure proper claim processing and prevent overpayments.

Understanding Multiple Health Insurance Policies

Individuals often have multiple health insurance policies for various reasons. This can include being covered by their own employer’s plan while also being a dependent on a spouse’s plan, or becoming eligible for Medicare due to age or disability while retaining private insurance.

Additionally, some individuals choose to supplement a primary health plan with another policy. This supplemental coverage might be for specific medical conditions, travel insurance, or to cover deductibles and copayments. Young adults may also be covered by a parent’s plan while having their own individual or employer-sponsored plan.

How Policies Interact: Coordination of Benefits

When a person has multiple health insurance plans, Coordination of Benefits (COB) determines how the plans work together to pay for medical expenses. COB ensures combined payments do not exceed the total cost of services by establishing a primary and secondary payer.

The primary plan processes the claim first and pays its share according to its benefits. After the primary plan pays, the remaining balance can be submitted to the secondary plan for consideration. The secondary plan then reviews the claim and pays its portion, if applicable, based on its own coverage limits. For instance, if a doctor’s visit costs $250 and the primary plan pays $200, the secondary plan could potentially cover the remaining $50, provided it is a covered benefit.

If an individual is covered by their own employer’s plan and also as a dependent on a spouse’s plan, their own employer’s plan is typically the primary payer. For children covered by both parents’ health plans, the “birthday rule” usually applies: the plan of the parent whose birthday falls earlier in the calendar year (month and day, not year) is generally primary. In cases of divorced or separated parents, the plan of the parent with custody often serves as the primary payer.

Federal Medicare Secondary Payer (MSP) rules dictate the order of payment for individuals with Medicare and another health insurance plan, such as an employer-sponsored group health plan. If the individual is 65 or older and covered by an employer’s group health plan with 20 or more employees, the employer plan is primary, and Medicare is secondary. If the employer has fewer than 20 employees, Medicare is typically primary. These rules also apply to certain disabled individuals and those with End-Stage Renal Disease.

Practical Implications of Multiple Policies

Multiple health insurance policies can reduce out-of-pocket expenses for covered medical services, as the secondary plan may pay for costs not fully covered by the primary, such as deductibles, copayments, or coinsurance. However, policyholders generally continue to pay two sets of premiums, which can be a significant cost.

While dual coverage can help offset some costs, the secondary plan only pays for services covered under its own terms and may not cover specific costs from the primary policy unless it is designed as a gap-filling supplemental plan. The coordination process can also introduce administrative complexities, requiring individuals to submit claims to both insurers, understand Explanation of Benefits (EOBs) from multiple sources, and potentially navigate delays in claim processing.

California’s Role in Multiple Policies

In California, coordination of benefits for multiple health insurance policies generally follows federal guidelines and industry standards. The state does not have specific laws that significantly deviate from common COB rules, such as the birthday rule or the employee-as-primary rule. California regulations do address COB provisions within health plans.

California Code of Regulations Section 1300.67.13 specifies that if a health plan contract includes a COB provision, it must be consistent with standard provisions. This regulation also states that a COB provision cannot be used to delay or deny reasonably necessary healthcare services. Consumers with managed care plans are overseen by the California Department of Managed Health Care (DMHC), which ensures compliance with state laws and regulations. The California Department of Insurance (CDI) regulates other health insurance policies, ensuring adherence to state insurance codes.

Medi-Cal, California’s Medicaid program, operates as the “payer of last resort.” This means if a Medi-Cal beneficiary has other health coverage, that coverage must be billed first before Medi-Cal considers payment. This rule ensures that other available health insurance resources are utilized before state funds are expended.