Everybody hopes to find an affordable health insurance plan that offers comprehensive coverage. But what happens when you have two health plans?

With dual health insurance plans, one is considered "primary" while the other is deemed "secondary." In some situations, having two health insurance plans can reduce your out-of-pocket costs. But in other cases, the added premium payment and deductible might increase your overall health expenses and cause further complications.

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Read on to learn more about the pros and cons of having dual health insurance coverage.

Key Takeaways

  • Having two health plans can help cover normally out-of-pocket medical expenses, but also means you'll likely have to pay two premiums and face two deductibles.
  • Health plans have coordination of benefits, which is a process that decides which plan is primary and which one pays second.
  • State

Can you have two health insurance plans?

Yes, you can have two health plans.

The most common example of carrying two health insurance plans is Medicare recipients, who also have a supplemental health insurance policy, says David Mordo, former national legislative chair and current regional vice president for the National Association of Health Underwriters.

It’s also possible that a married couple could have two health insurance plans, even if each spouse is covered through a health insurance plan at their workplace.

“They’re both covered under their own policies with their companies, but one of the spouses decides to (also) jump on their spouse’s plan,” Mordo says.

You also might have two health insurance plans if you have health insurance but also receive Medicaid coverage. Or, perhaps you are under the age of 26 and have group coverage both through an employer and your parents' health insurance.

Other examples of when you might have two insurance plans include:

  • An injured worker who qualifies for worker's compensation but also has his or her own insurance coverage.
  • A military veteran who is covered by both Veterans Administration benefits and his or her own health plan.
  • An active member of the military who is covered both by military coverage and his or her own health insurance.

Primary and secondary insurance rules

When you have two forms of health insurance coverage, your primary insurance pays the first portion of the claim up to your coverage limits. Your secondary insurance may pick up some or all of the remaining costs.

However, you still might be responsible for some cost-sharing. For example, it’s a mistake to think your secondary insurance will kick in and cover the deductible attached to your primary insurance. Instead, you likely will be responsible for covering the deductible.

You also may be responsible for copay and coinsurance fees.

Coordination of benefits

When you have primary and secondary health plans, the insurers use a framework to work together. That way, both health plans pay their fair share without paying more than 100% of the medical costs. This process is called coordination of benefits.

Coordination of benefits decides which plan pays first (the primary plan) and which pays second (the secondary plan).

In some cases, a state or the federal government may set up the COB regulations. Large employer group plans create their own COB rules, too.

Here’s how COB works when there’s a health insurance claim:

  • It first goes to the primary plan. The insurer pays what it owes.
  • If there’s money still left on the bill, it then goes to the secondary insurer, which picks up what it owes.
  • After that, if there’s still money left on the bill, the member gets a bill for the remaining money.

What is the difference between primary and secondary health insurance?

When a member has double insurance, his or her individual circumstances determine which insurance is primary and which is secondary. Following are some examples of how this might work:

  • A married couple- A wife has a health plan with her employer, but her husband’s health plan also covers her. In this case, the wife’s employer is the primary insurer and the spouse’s health plan is secondary.
  • A child under 26- The Affordable Care Act lets children stay on their parents’ health plan until they turn 26. That could result in a child having her own health plan through an employer while remaining on the family’s plan. In that case, the child’s health plan is primary and the parents’ plan is secondary.
  • Parents have separate plans and a child is on both plans- In this situation, the so-called birthday rule applies. Whichever parent has the earlier birthday in a year is considered the primary health plan and the other spouse is secondary. It’s not which parent is older. Instead, it’s which one has the earliest birthday in a calendar year.
  • Medicare and a private health plan – Typically, Medicare is considered primary if the worker is 65 or older and his or her employer has less than 20 employees. A private insurer is primary if the employer has 20 or more employees.

Primary insurance

The primary insurance payer is the insurance company responsible for paying the claim first. When you receive health care services, the primary payer pays your medical bills up to the coverage limits. The secondary payer then reviews the remaining bill and picks up its portion.

Coordination of benefits rules determine which of your insurance companies is the primary payer.

Secondary insurance

The secondary health insurance payer covers bills that the primary insurance payer didn’t cover.

However, it is crucial to remember that the secondary insurance company may not pay all of the rest of your bills. You may be responsible for some health care costs.

Also, the primary and secondary insurance companies make sure they aren’t paying more than 100% of the overall bill.

Primary insurance vs secondary insurance: Who pays first?

Coordination of benefits isn’t always standard. Plans can differ, so it’s vital to talk to your employer’s benefits department and health plan if you have two health plans.

That said, here are situations when you may have more than one health plan and which one would likely be the primary insurer and which would be secondary:

Married; both spouses have plansYour employerYour spouse's employer
Child with two plans from married parentsParent with earlier birthday in calendar yearParent with later birthday
A child has divorced parentsParent with custody--
A child with own policy (from school or work) and still on parent's health planChild's planParent's plan
A child is married and on spouse's and parent's policiesChild's spouse's planParent's plan
A pregnant child on a parent's planChild's plan--
Workers' compensation and health insurance planWorkers' compensationHealth plan
COBRA and other insuranceEmployer's planCOBRA
Medicare and a private health insurance planMedicare if employer has 100 or fewer employees; private insurer if more than 100 employeesPrivate insurer is 100 or fewer employees; Medicare if more than 100 employees
Veterans Administration (VA) and a private health insurance planPrivate insurer--
Military coverage (TRICARE) and other health insuranceOther insurerTRICARE except if other plan is Medicaid
Medicaid and other planOther insurerMedicaid

Frequently Asked Questions

How do you determine which health insurance is primary?

Determining which health plan is primary is straightforward: “If you are covered under an employer-based plan, that is primary,” Mordo says.

If you also were covered under a spouse’s plan, that would be secondary, he adds.

In certain situations, seniors who are 65 and still working may be covered under their employer's plan and eligible for medicare.

"Depending on the size of the employer, Medicare can be primary or Medicare can be secondary," Mordo says.

If the employer has 20 or more employees, the employer's health plan will be primary, and Medicare will be secondary.

Should I consider secondary health insurance coverage?

Some people think in terms of “primary insurance vs. secondary insurance.” But the two types of insurance can complement one another.

For example, Mordo says Medicare beneficiaries can benefit from having both Medicare (including Part A and Part B) and a supplemental policy.

“There are great advantages to that because the supplemental policy picks up whatever Part A and Part B does not cover,” he says. “That is a huge savings on potential out-of-pocket cost for a Medicare beneficiary who might be on a fixed income.”

It’s also true that dual health plans can reduce your health care costs if the secondary insurance picks up some medical costs that your primary plan doesn’t cover.

However, Mordo believes the downsides of having two health insurance policies usually outweigh any benefits.

“The disadvantage is the outlay in additional premiums,” he says. “You're paying for two plans, and the benefit is minuscule.”

Other downsides to having two health plans include:

  • Have two deductibles, which you pay before the health plan kicks in its share.
  • Dealing with two health companies.
  • Remembering the specifics of two different types of health plans that might have different designs, such as a preferred provider organization (PPO) and health maintenance organization (HMO) plan.
  • Making sure your provider and hospital knows which plan is primary and which one is secondary. Having dual coverage also might require more paperwork headaches if a health plan denies a claim or pays less than you expected.
  • Staying in-network for both plans whenever possible. Some plans, such as an HMO, don’t allow out-of-network care, while another plan like a PPO lets you get out-of-network care, but you pay more for it.
  • Recalling the covered benefits for each plan. One plan may pay for a test or prescription, while another may deny it.

How do deductibles work with two insurances?

If you carry two health insurance plans and have deductibles with each plan, you’re responsible for paying both of them when you make a claim.

In other words, don’t expect that if you pay a deductible on one plan, it will eliminate your obligation for the deductible on the other plan.

Can you be covered by two health insurance plans?

Yes, you can be covered by two health insurance plans.

In some cases, each member of a couple might have health insurance through their employer. Children up to the age of 26 also might have coverage through their employer and their parents.

It is also possible for others – such as members of the military and those who are on Medicare but are still working – to have more than one form of coverage.

However, being covered by two plans is the exception to the rule. If you’re covered by one solid employer-based health insurance plan, that’s usually sufficient for most people, Mordo says.

“You’re really not getting any benefit by being covered by two different employer-based plans,” he says.

Does secondary insurance pay primary deductible?

No. If you have a deductible on one or both plans, you will need to pay those deductibles before your insurance reimburses you for care.