Can You Have Two Health Insurance Plans? How Secondary Insurance Works


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Updated: May 22, 2024

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Whether or not you realize it, having two health insurance plans is common. For example, spouses can have their own policy while also being covered by each other’s employer plan. Young adults (those under 26) can have health insurance from their employer and coverage from their parent’s policy. In the same way, if you’re under 26 and married, your spouse’s and parent’s policies can cover your medical expenses. A child can be covered by both parents’ health insurance (assuming they have individual plans).

However, your insurers won’t receive your bill simultaneously, so they can’t cover the same medical expense. These are subject to primary and secondary insurance rules, so one will be billed before the other. You can’t earn from a medical need because although your second policy may help you with the costs from your first, your total coverage can’t be more than 100% of your health expenses.

Key Takeaways

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You can have two health insurance plans, but primary and secondary insurance rules apply, so you can’t receive reimbursement for more than the total cost of your medical expenses.

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There are many benefits to having dual insurance coverage, but you must also consider the potential drawbacks before deciding whether it’s the best option for you.

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Your coordination of benefits provision determines which health insurance plan is primary and secondary. It identifies which pays first and helps prevent duplication of benefits.

What Is Secondary Insurance?

Claiming that you have double coverage if you have two health insurance plans might be misleading — after all, your insurers won’t cover the same amount for the same medical need. The second health plan becomes your secondary health insurance. It only takes effect when your primary insurance plan pays for your medical expenses based on the policy.

Secondary health insurance can help you manage costs since you may be able to use it to pay for your primary plan’s deductible, copays or coinsurance. It can also cover some or all of the amount left to pay once your first policy processes the claim. However, secondary insurance can also increase expenses because it has a separate deductible and premium.

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Primary and Secondary Health Insurance Rules

Your primary health insurance varies depending on your situation. For example, some couples cover their spouses through each other’s employer plans. Your employer’s plan becomes primary, while your spouse’s plan is secondary. Health coverage from a policy where you’re a dependent (for example, under your parents’ or spouse’s plan) is always secondary. Medicare plans are usually primary, with your employer or private plan secondary.)

Whichever is your primary insurance will receive your claim first and will pay it out according to your policy limits. Your insurer does this as if there is no secondary health insurance provider. Once your primary insurer pays off your claim, your secondary plan takes effect and covers its share of your health expenses. You’ll have to cover any remaining amount after that out of pocket.

The National Association of Insurance Commissioners developed the coordination of benefits (COB) provision. Although it isn’t a law, it does serve as an industry standard. The COB determines which plan pays your health insurance claim first — these are usually larger insurance companies. Programs such as Medicaid are typically last. You cannot go back and forth between your health plans: the primary will always be primary and will pay first. The same system ensures that payments don’t overlap, so the amount your policies cover will never exceed 100% of your medical costs.

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UNDERSTANDING THE BIRTHDAY RULE

If you and your spouse both cover your child in your health insurance plans, whose coverage is primary? The answer lies in your birthdays. The coordination of benefits includes several rules that determine primary and secondary plans — one of which is the Birthday Rule. It states that the policy of the parent whose birthday comes first during the year becomes the child’s primary health insurance.

It pays to understand which policy offers the best kid’s health insurance, and you may consider dropping one of the existing plans to ensure the best coverage for your child.

Pros and Cons of Having Two Health Insurance Plans

You can get multiple benefits from having two health plans. However, considering the average cost of health insurance, it may also come with drawbacks. It’s best to factor in the pros and cons of having dual insurance coverage before deciding whether it’s your best option.

Pros and Cons

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Pros
  • You can receive more coverage and benefits, especially if your two plans are complementary. Your secondary health insurance can cover what your primary doesn’t.
  • It ensures health insurance when unemployed. Even if you lose your employer plan, your secondary insurance still provides coverage.
  • It can reduce your overall out-of-pocket costs since you’ll only shoulder the amount not covered by your primary or secondary health insurance plan.
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Cons
  • You’ll have to pay for separate premiums and deductibles, which may increase your costs.
  • The coordination of benefits can be complicated, resulting in a longer reimbursement process.
  • Your plans may be too similar and have overlapping coverages, preventing you from maximizing both policies.

The best scenario for having two health insurance policies is if they can provide better coverage without increasing your costs. Keeping both is a solid option if one is free or both health plans are low-cost.

Dual Coverage FAQs

Having two health plans can be an excellent way to have protection against medical costs. However, there are several factors to consider before purchasing secondary health insurance. MoneyGeek included the answers to some commonly asked questions to provide more information.

Can I have two health insurance plans?
How do primary and secondary insurance work?
Is having two health insurance worth it?

About Angelique Cruz


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Angelique Cruz, a researcher and content producer at MoneyGeek, specializes in writing informative content on personal, auto and home loans. She has extensive experience developing content on macroeconomics, financial statistics and behavioral finance. She also has a 10-year background in management consultancy.

Cruz has a psychology degree from Ateneo de Manila University.