What Is a Patient With More Than One Insurance Considered?

While many people rely on a single health insurance policy, individuals are often covered by more than one plan. This dual, or even triple, coverage can offer broader protection and reduced out-of-pocket expenses. However, understanding how these multiple plans interact and determining which one pays first can be confusing. Specific rules and processes manage these scenarios, ensuring benefits are applied correctly and efficiently.

Understanding Coordination of Benefits

A patient with more than one health insurance policy has multiple coverages, managed under Coordination of Benefits (COB). COB is a standardized process that health plans use to determine the payment order when a person has two or more health insurance plans. Its purpose is to prevent duplicate payments for the same healthcare services and ensure that total benefits paid by all plans do not exceed the total cost of medical care received.

COB clarifies which plan is primary and which is secondary, or even tertiary. The primary payer processes claims first, according to its benefits schedule, covering its share of costs. Any remaining eligible expenses are then forwarded to the secondary payer, which may cover some or all of the outstanding balance. COB rules streamline billing, reduce administrative errors, and help control healthcare costs for insurers and patients.

Reasons for Multiple Health Insurance Coverage

Individuals often have more than one health insurance policy due to various life circumstances. A common scenario involves spouses who both have employer-sponsored health plans and cover each other or their dependent children under both policies. For instance, one spouse might be covered by their own employer’s plan and also be a dependent on their partner’s plan.

Children may be covered by both parents’ plans, particularly in dual-income households or in cases of divorced or separated parents. Another occurrence is when individuals become eligible for government-sponsored programs like Medicare or Medicaid while maintaining a private insurance plan. For example, those aged 65 and older often have Medicare while retaining private coverage through a former employer or a supplemental plan. Individuals transitioning between jobs might also have overlapping coverage, such as COBRA from a previous employer alongside a new employer’s plan.

The Order of Benefits

Determining which health insurance plan is primary and which is secondary involves established rules and guidelines. The primary plan processes claims first, and the secondary plan then reviews any remaining balance.

For dependent children covered by both parents’ plans, the “Birthday Rule” is commonly applied. This rule dictates that the plan of the parent whose birthday falls earlier in the calendar year (month and day, not year) is primary. If both parents share the same birthday, the plan that has covered the individual for the longer duration typically becomes primary. In situations involving divorced or separated parents, the custodial parent’s plan is generally primary, unless a court order specifies otherwise. If a court decree assigns responsibility for healthcare expenses to a specific parent’s plan, that plan is primary, provided the insurer has knowledge of the decree.

When an individual has coverage through their own employer and is also covered as a dependent under another plan, their own employer-sponsored plan is usually primary. For those with Medicare, coordination varies depending on the type of other insurance. Medicare typically serves as the primary payer if the individual is 65 or older and working for an employer with fewer than 20 employees. However, if the employer has 20 or more employees, the group health plan is generally primary, and Medicare is secondary. Medicaid generally acts as the “payer of last resort,” meaning it typically pays only after all other available insurance resources have been exhausted.

Navigating Healthcare with Multiple Plans

Managing healthcare with multiple insurance plans requires careful attention to ensure proper claims processing and to understand potential out-of-pocket costs. When a patient has more than one plan, healthcare providers usually submit claims to the primary insurer first. Once the primary plan processes the claim and pays its portion, an Explanation of Benefits (EOB) statement is issued, detailing what was covered. This EOB and the remaining balance are then sent to the secondary insurer for their review and payment.

While dual coverage can reduce a patient’s financial responsibility, it does not mean all costs will be eliminated. Patients may still be responsible for deductibles, copayments, and coinsurance under both plans, though the secondary plan can help cover these amounts. For example, if the primary plan covers 80% of a service, the secondary plan might cover a portion or all of the remaining 20%, depending on its terms. Patients should inform their healthcare providers about all their insurance coverages at the time of service. Keeping thorough records of medical bills, EOBs, and communications with insurers can help track payments and address billing discrepancies.