Can You Use Two Health Insurance Plans?

Individuals can have more than one health insurance plan. This situation, often called dual coverage, means that multiple plans may contribute to covering medical expenses. Understanding how these plans interact is important for managing healthcare costs and benefits effectively. This article explains the mechanisms governing multiple health coverages.

The Concept of Multiple Health Coverages

When an individual has more than one health insurance plan, insurers use a standard process called Coordination of Benefits (COB). COB ensures medical expenses are covered without overpayment or duplicate payments, by determining the order in which multiple health insurance plans pay for services.

One plan is designated as the “primary insurance,” responsible for processing claims and paying its share first. After the primary plan processes the claim, the “secondary insurance” reviews the remaining balance. The secondary plan may then pay for costs not covered by the primary plan, within its own coverage limits. This process helps manage overall healthcare costs.

Rules for determining which plan is primary and secondary depend on the type of plans and circumstances. For instance, an individual’s own employer-sponsored plan is typically primary over a spouse’s plan. Active employment coverage is usually primary over retiree coverage. These COB rules, while varying by insurer and state, establish a structured approach to claim processing.

Common Scenarios for Dual Coverage

Coordination of Benefits rules are applied to various common situations where individuals hold two health insurance plans. These rules dictate which plan pays first, ensuring an orderly payment process for healthcare services.

When both spouses have their own employer-sponsored health plans and cover each other, the individual’s own employer-sponsored plan is typically primary for their own claims. The spouse’s plan would then serve as the secondary coverage. This arrangement ensures that the primary plan covers its share before the secondary plan addresses any remaining eligible costs.

For children covered by both parents’ health plans, the “Birthday Rule” is commonly applied to determine primary coverage. The plan of the parent whose birthday month and day occur earlier in the calendar year is usually primary. The other parent’s plan then becomes secondary, regardless of which parent is older.

When Medicare is involved, its role as primary or secondary depends on several factors. If an individual aged 65 or older is still working and their employer has 20 or more employees, the employer’s health plan is typically primary, and Medicare is secondary. However, if the employer has fewer than 20 employees or if the coverage is retiree benefits, Medicare generally acts as the primary payer.

Medicaid usually functions as the “payer of last resort,” meaning it typically acts as secondary coverage when another insurance plan is available. The private insurance plan will pay first, and then Medicaid may cover remaining eligible expenses. For individuals with COBRA continuation coverage and another plan, the COBRA plan’s primary or secondary status depends on whether the other coverage existed before COBRA or is a new employer plan. COBRA allows temporary continuation of health coverage after certain events like job loss.

Navigating Benefits and Payments with Two Plans

When medical services are rendered, the primary plan processes the claim first, applying its specific deductible, copay, and coinsurance amounts. A deductible is the amount an individual must pay before their insurance benefits begin to cover a larger portion of costs. A copay is a fixed amount paid for certain services, like a doctor’s visit, while coinsurance is a percentage of the medical charge paid after the deductible has been met.

After the primary insurer has paid its portion, any remaining balance is then submitted to the secondary plan. The secondary plan reviews the claim and may cover some or all of the costs that the primary plan did not, such as deductibles, copays, or coinsurance, according to its own benefits and coverage limits. For example, if the primary plan pays 80% of an allowed amount, the secondary plan might then cover a portion of the remaining 20% or other patient responsibilities. This coordinated payment process can significantly reduce the patient’s out-of-pocket expenses.

It is important to note that having two plans does not mean an individual receives double benefits or that all costs will be covered. The combined payment from both plans will not exceed 100% of the total medical expenses. While a secondary plan can help with costs like deductibles or copays, it will only do so based on its own policy terms, and it may not cover the full amount left by the primary. Out-of-pocket maximums, which limit the total amount an individual pays in a year, can also be affected, as the secondary plan’s payments might contribute towards meeting the primary plan’s maximum.

The Claims and Administrative Process

Inform all healthcare providers about both primary and secondary insurance plans at the time of service. Providing this information upfront helps ensure claims are submitted correctly from the outset.

Typically, the healthcare provider will submit the claim first to the primary insurer. Once the primary insurer has processed the claim and paid its portion, the provider then submits the remaining balance to the secondary insurer. This sequential submission ensures that Coordination of Benefits rules are followed.

After the primary claim is processed, an Explanation of Benefits (EOB) will be sent by the primary insurer. An EOB is not a bill; it is a statement detailing how the claim was processed, what the insurer paid, and what amount, if any, remains the patient’s responsibility.

Patients should review both the primary and secondary EOBs to understand how charges were processed and to verify the amounts owed. If a claim does not automatically “cross over” from the primary to the secondary insurer, or if there are issues, the patient may need to provide the secondary insurer with a copy of the primary EOB. In some cases, manual submission of claims to the secondary insurer may be necessary. If discrepancies or problems arise, contacting the insurers or the healthcare provider for clarification and resolution is an important step.