Choosing your insurance policy can be quite a daunting task, especially if you’ve opted into a private insurance policy for one reason or another. This is made especially confusing if you approached the topic of primary and secondary health coverage.
If your employer doesn’t offer health insurance or you’re retiring and looking into private health insurance coverage, you may be wondering just how vital health insurance really is – especially if you’re a relatively healthy individual. Before understanding what primary and secondary health coverage is, it’s vital to understand the importance of health coverage from both a health and financial aspect.
Do You Need Health Insurance Coverage?
Yes, you do.
Whether they’ve lost coverage because their new employer doesn’t offer employee health benefits, you’ve recently retired and lost employee benefits, or you simply believe you cannot afford health insurance – you likely have questioned whether or not you really need health insurance coverage. This question is even more popular amongst those who feel relatively healthy overall and practice regular health and wellness practices.
It doesn’t matter if you consider yourself a healthy individual – research shows that those without health insurance incur just as much, if not more, out-of-pocket medical costs per year as those who do have coverage. Out-of-pocket costs can include:
- Medical services, such as visiting the doctor for a sinus infection or the ER for a laceration.
- Medical supplies, including contact lenses/glasses or breathing apparatus for those with breathing difficulties.
- Prescription drugs
While you may not need these services and supplies regularly, there is no way to predict when something may happen to cause you to fall ill or injured. If you do, then you could be left with a massive medical bill that you simply cannot afford.
Health insurance is a safety net that allows you to pay a monthly premium, meet deductibles, set out-of-pocket costs in exchange for discounted services, and help pay for various medical needs. This helps ensure that consumers aren’t left in extreme financial debt simply for seeking out medical help when they need it most.
The good news is that there are many types of policies available to consumers of varying income-levels and eligibility. That means that there are options for those who need coverage but believe that it’s out of their price range. Policies can range from free state care to private insurance policies with financial assistance available to make monthly premiums more affordable to employer-provided policies. Types of policies can and will depend on where you live and income level, so you’ll want to make sure you take your time and do adequate research into what your options are.
Can You Have Two Health Insurances?
Now, when it comes to the topic of what is primary and secondary health coverage, many consumers are left scratching their heads, wondering if it’s possible to have two health insurance policies.
Is it illegal to have two health insurance policies? Not at all! In fact, as consumers get older, it becomes more common to have a primary insurance policy, such as Medicare, and then a secondary supplemental policy to help cover anything that Medicare may not cover.
Primary and Secondary Health Coverage
Before diving into how the entire process works, it’s essential to understand what primary and secondary health coverage are.
What is Primary Health Insurance?
Primary health insurance is precisely what it sounds like – your primary coverage. These plans typically cover your essentials, such as your basic health care needs, including:
- Doctor’s visits
- Yearly exams
- Necessary vaccinations
- Prescription drugs
- Pregnancy care, etc.
Now, depending on what your specific plan covers, you may notice that you have some gaps in your coverage. In this case, it’s beneficial to invest in a secondary health insurance plan.
What is Secondary Health Insurance?
Secondary health insurance is, again, precisely what it sounds like – secondary coverage. Once your primary coverage has paid its share and/or met its coverage limits, your secondary coverage is then billed the remaining balance. Depending on the plan’s details, they may cover part or all of the remaining costs.
How Does Dual Insurance Coverage Work?
When researching your primary and secondary health coverage options, you may run into the term dual insurance coverage. So far, we’ve talked about how many retirees and elderly individuals have both a primary and secondary insurance plan, but does that mean only the elderly can apply for and have multiple plans?
Not at all! In fact, consumers of varying ages often have dual insurance coverage, including:
- Married couples
- Couples with dependents
- Dependents under the age of 26 are covered by their parent’s policies and their own school or employer benefits.
So, how exactly does one go about getting dual insurance coverage?
Coordination of Benefits
When someone is eligible for health care benefits under two different plans, such as through your employer and through your spouse’s employer, you’ll want to coordinate your benefits to ensure you can get the best from each one. This process is called the coordination of benefits and allows you to maximize the coverage provided by each plan.
This is where the terms primary and secondary health coverage come into play. To coordinate your benefits for maximum savings, you’ll need to identify one plan as the primary plan and the other as the secondary. Once that’s done, then each claim you submit will go through the primary plan first. Any remaining balance will then be processed by your secondary plan, which often covers the remaining balance in part or entirely, leaving you with no out-of-pocket expense for that service.
When coordinating your benefits, you may be asking, “what is the process of determining which company is primary and which is secondary?”
Choosing which plan is primary and which is secondary will depend on the situation at hand:
- Individuals: As a single individual, you may purchase multiple health insurance policies; however, many of these instances require you to purchase your primary policy and then add on supplemental policies, such as gap insurance, to help you fill in the necessary weak points in your primary policy.
- Married and each adult has a plan through their employer: in this case, your plan will be the primary, and your spouse’s plan becomes secondary.
- You have a health plan and receive Medicaid: Your health insurance plan will be the primary coverage, while your Medicaid coverage is considered secondary.
- You’re a dependent, and your married parents have you on each of their plans: In this scenario, the “birthday rule” applies. That means that whichever parent was born first, their coverage would be considered the primary, and the younger parent’s coverage would be considered secondary.
- You’re a dependent with divorced parents who have you under their policies: This is a bit more complicated. If parents have joint custody, then the birthday rule will apply. If that isn’t the case, then the parent’s insurance plan who claims custody of the child will be considered the dependent’s primary coverage, and their other parent’s coverage will become secondary.
- Under 26, married but still covered under parent’s plan: In this case, your insurance will be the primary plan, and your parent’s plan will become the secondary coverage.
- You’re a dependent and have your own coverage through school/employer, but still covered by your parent’s plan: If you’re under the age of 26, then, in this scenario, your school/employer insurance is considered your primary coverage, and your parent’s insurance would be considered your secondary coverage.
Utilizing Your Dual Insurance Coverage
Once you have identified which of your plans will be your primary and secondary, you’ll want to make sure you make all your healthcare providers aware of this updated information.
While you can wait until your next visit to your primary care provider or any other practitioner you are currently seeing to update your insurance information, you may want to update your files beforehand so there are no hiccups at the time of your visit.
In many cases, you may have an online patient portal that you can visit and input your new insurance information so that your files are all updated before your next visit. If you don’t, you should call or walk into your insurance provider’s office and have them update your file as necessary. In either case, just be sure you are marking your primary and secondary insurance providers accordingly.
With your files all updated, you won’t have to worry about the details, as your doctor/practitioner will know exactly how to process your claims.
It’s important to note that you want to properly educate yourself on the benefits of both plans to ensure you aren’t caught off guard by any “you may owe” amounts that show up on your bill after your secondary policy has had a chance to process the claim. Just because you have two plans doesn’t mean all bills will be covered at 100%.
How Can You Add Someone to Your Plan?
Now, say you are newly married, and your spouse wants to be added to your insurance policy and use that as their secondary coverage. How exactly do you go about that? The good news is that it’s not nearly as difficult as some may think.
It will depend on the plan’s rules. Adding a spouse to your insurance plan will simply entail updating your policy to either enroll in a new family plan or add your spouse as a dependent. Just remember, your plan premiums and deductibles will likely increase. So, don’t be surprised if you begin to notice more money being taken out of your paycheck or a larger bill delivered than you are used to.
What about adding new dependents to your plan? Whether you are adding your new baby to your health coverage or you are adding your spouse’s children to your plan, the process is almost always the same as adding your spouse. Just remember, if your spouse has a plan the dependents are currently covered under, the birthday rule will likely apply if the spouse’s children’s biological parent isn’t involved in their lives.
However, if the child’s biological parent is still covering the child under their medical plan and is considered the child’s secondary coverage, then you may not be eligible to cover them. If your spouse’s only source of health insurance is through your provider, then their child may be covered as this is the only insurance coverage their parent has. In these cases, it is vital to speak with your insurance provider to get all the necessary information to ensure the child is getting adequate coverage.
What to Look for In Your Primary and Secondary Health Coverage Plans
If neither your or your spouse’s employer provides employee health benefits, then you’ll need to start researching both primary and secondary health insurance policies. While this may seem like an intimidating process, all it takes is a little guidance, research, and prioritizing the health needs of you, your spouse, and those of any dependents.
For instance, if everyone in your family is considered relatively healthy, then a standard silver or gold plan will likely be suitable.
However, should you or someone in your family require additional coverage for, say, mental health needs, then you’ll want to choose a primary insurance plan that has a higher coverage for these needs, including counseling services, medication, and maybe even hospitalization/observation. Then, you can choose a more standard plan as your secondary insurance coverage to help you cover additional costs not covered by your primary plan.
If this process seems too intimidating, then don’t ever be afraid to reach out to an insurance professional to help guide you through the process. These individuals can help you identify needs and help you find both primary and secondary coverage that will help you make the most of each plan.
Now that you have a basic understanding of what primary and secondary health coverage is, you should feel more comfortable deciding if having dual coverage is for you or not. Still have questions that need addressing? Then you’ll want to check out this handy FAQ on primary and secondary health insurance to help you fill in the blanks:
Do You Need Both Primary and Secondary Health Insurance Coverage?
No – you do not need to have dual coverage. However, it can prove highly beneficial to those who are looking to increase their overall savings on out-of-pocket medical costs.
Does Secondary Insurance Pay the Primary Deductible?
This will depend on the plan you are enrolled in. However, many secondary plans can help you pay off deductibles that your primary plan isn’t paid.
Remember, your secondary coverage is intended to help you pay any eligible out-of-pocket costs that are not paid by your primary coverage. This can sometimes include deductibles, copays, and coinsurance. Before assuming, always reference your primary and secondary policy information to see what is and isn’t covered, so you know what to expect.
Can Dependents Be Covered Under a Parent’s Primary and Secondary Health Coverages?
Yes! Depending on the situation, most dependents under 26 years of age can remain under their parent’s primary and secondary health insurance. Just remember that in the case each of the parents has a plan, the primary insurance coverage will be determined by the policy held by the older parent, and the secondary coverage will become the policy held by the younger parent.
Could You Still Have Out-of-Pocket Costs if You Have Dual Coverage?
Unfortunately, when many consumers enroll in dual coverage, they mistakenly believe that all of their out-of-pocket medical costs will be paid in full by the time the secondary plan has processed the claim.
While dual coverage helps you save significantly on out-of-pocket costs, it does not ensure that you will pay zero dollars in out-of-pocket costs throughout the year. Remember, having a secondary insurance policy will still have coverage limits depending on the plan you choose to go with.
So, for example, say you have a $1,000.00 medical bill, and your primary health coverage covers 80%. That means your secondary coverage will process a bill of $200.00. If your secondary coverage covers 80% as well, then that will leave you with a bill of $40.00 that will still need to be paid out of pocket.
However, there may indeed be some instances when you’ll find yourself paying nothing out of pocket! You just want to make sure you are fully educated on what each of your policies entails, so an unexpected out-of-pocket fee doesn’t catch you off guard.
Can You Add Someone to Your Plan If They Aren’t Your Spouse?
When it comes to your insurance policy, primary or secondary, you’ll want to reach out to them to see if you can add someone who isn’t your spouse or your dependent.
In some instances, insurance companies will allow you to add someone to your medical insurance plans if they:
- Can be claimed as a dependent on your tax return.
- Cannot be claimed on someone else’s tax return for the same year.
- Must be a member of your household for the entire year (especially if a non-relative).
- Have a gross income for the year that is less than the requirement indicated to be claimed as a dependent on your tax return.
- Cannot get their own insurance.
- Is the biological parent of your dependent and isn’t on someone else’s plan.
Again, these requirements can and will vary by location, policy, and provider. So, before making any assumptions, make sure you are checking with your provider to see what requirements you need to meet to add someone new to your plan.
Can Your Secondary Health Insurance Provider Reject a Claim?
Yes – a claim can be rejected by your secondary health insurance provider for any number of reasons. As with any insurance plan, you need to pay careful attention to all the fine details.
Some common reasons a claim may be rejected include:
- Claim codes do not match up.
- Claims are being sent with incorrect billing information.
- Invalid member ID
- You were not eligible for medical benefits for submitted dates of services.
- Missing claim description
- Incorrect health care diagnosis code
- Invalid bill type
- Payer has received the exact claim/service before
Of course, this is by no means an extensive list of reasons why your claim may be rejected.
Should your claim be rejected, you will want to contact your insurance provider and ask them why and to explain it to you in detail. Sometimes all it takes is the provider who rendered your services to reenter the claim with the proper codes or billing/member information to have the claim processed successfully.
Is It Worth Having a Secondary Health Insurance?
For many individuals, having a primary health insurance policy is more than enough. As an individual, you may qualify for a plan that meets all your current needs! However, if you’re looking for ways to help you further cut your out-of-pocket medical costs or you’re looking to start a family with your special someone, then you may want to consider the benefits of having a secondary health insurance plan.
The good news is that if you and your partner are considering marriage, you may already have access to a secondary health insurance plan at the ready. If your soon-to-be spouse’s employer-provided plan allows them to add you onto their policy, you can keep your current plan as your primary health coverage and then use your spouse’s coverage as your secondary plan.
Should you decide to have and/or adopt/foster children, you can add them to your dual coverage. Just remember, when it comes to your dependents, choosing primary and secondary health coverage will likely come down to the birthday rule – leaving you with little to no say in which one of your plans is processed first.
While the initial cost of having two plans may seem a bit intimidating, it’s important to remember that the benefits of additional coverage and lower out-of-pocket costs can save you significantly in the long run.