The phrase “two are better than one” can be applied to many situations. In this context, two plans help people access needed care and save a few bucks on annual medical costs.
Although it can be a burden in many cases, having two plans can make it easier. It can be a strategic decision or the result of various circumstances, specific needs, or a desire for comprehensive coverage.
But, you should exercise caution when selecting them, otherwise, it could end up costing you more than expected. Considering this, adequate knowledge is required. For that, you need to access a detailed exploration of primary and secondary insurance.
Here on this note, you can expect to decode primary and secondary insurance, know the value of secondary insurance, how to select it, real-life scenarios, and more.
So, without any further ado, let’s get started.
Decoding Primary and Secondary Insurance
By understanding the difference, you can make the best health care decisions. Considering this, we’ve decoded both insurance options to help you understand them clearly.
Primary Insurance
This health plan covers a person as an employee, subscriber, or member and is a policy that claims will be billed first. The claim then will be processed as per the patient’s insurance plan and payments are paid according to the benefits.
Secondary Insurance
This pays after your primary insurance. To make it simple, the secondary plan is billed when the primary plan is exhausted, and it might help cover additional health care costs.
For instance, if an individual already has insurance through their employer and chooses to enroll with their spouse’s health insurance plan, then that coverage would become secondary insurance.
Fast Fact:
In 2020, the healthcare expenditures per capita averaged $10,191 in the U.S., according to Forbes Advisor.
Primary and Secondary Health Insurance Rules
If allowed in a country, state laws and insurance policies determine which plan becomes the primary and secondary. Here’s how each scenario impacts your insurance:
| Scenario | Primary Insurance Designation | Secondary Insurance Designation |
| The employer-sponsored your and your spouse’s or partner’s plan. | Your employer-sponsored plan | Your spouse or partner’s plan |
| Medicaid plus employer-sponsored plan | Employer plan | Medicaid |
| A child receiving coverage from both parent’s separate plans (condition applied: not divorced) | The parent with the earlier birthday in the calendar year (As per the Birthday Rule) | The parent whose birthday occurs later in the calendar year |
| A child receiving coverage from both parent’s plans (divorced or separated) | The parent with custody provides primary coverage. With joint custody, you have to follow the birthday rule described above. | If the parent having custody remarries, then the new spouse’s plan will provide secondary coverage. And, if not, the parent without custody is secondary. |
| Child under 26 with insurance from a student or employer plan plus your parent’s dependent coverage | Your student or employer’s plan | Parent’s plan |
When you have multiple plans, the companies work together to decide which plan pays first and which one pays second. This process is known as the “coordination of benefits”.
Do You Know?:
According to the Forbes Adviser report from 2024, employment-based health insurance was the most common subtype of health insurance coverage. However, it covers 54.5% of the American population.
The Value of Secondary Insurance
Having two plans might sound like a benefit with no costs. But, there are points to consider on either side. When the primary insurance has been covered it is obligated to pay and will not cover additional services.
In such a situation, secondary insurance comes into the picture. Here are three common pros:
- More Savings: Having 2 plans at the same time can offset more costs, which eventually increases the savings when receiving healthcare. Let’s say, the primary plan might only cover 80% of a specific procedure. And, if the second plan covers the rest of the 20%, you bear no cost.
- Continuous Coverage: Inability to pay for coverage for whatsoever reason can result in a lapse. So, even when you have lost your job or turned 26, with secondary insurance you can continue even if you lose your primary plan.
- More Accessible Care: Plans may or may not cover everything. So, when some plans limit what types of procedures and care providers you can access, with multiple plans, you can expand your access.
Other benefits can include coverage of:
- Deductibles and copays
- Dental or vision services
- Critical care for accident-related injuries, cancer care, and other unexpected occurrences
Real-Life Scenarios: Navigating Primary and Secondary Insurance
To better understand both the coverage, it is helpful to consider real-life scenarios. Let’s understand with a hypothetical scenario.
The example involves a patient with ABC as their primary insurance and XYZ as their secondary insurance. ABC includes a $1,000 annual deductible 80/20 coinsurance $30 copay whereas XYZ includes a $50 deductible 80/20 coinsurance with no copay.
Now, in case of any medical emergency, the claim is first sent to ABC. ABC now processes the claim for adjustment, the allowed amount, deductible, and Copay.
Still, there is some balance left, and the patient has secondary insurance. In such cases, the claim should include the EOB from the primary insurance so that XYZ can see how the primary processed it.
XYZ is responsible for the first value of the allowed amount, and the remaining amount is then split between the patient and the insurance company.
Statistics: According to KFF, this analysis of insurers’ preliminary rate filings indicates that ACA Marketplace insurers are requesting a median premium increase of 6% for 2024.
Your Action Plan for Insurance Coordination
Here is a step-by-step action plan for individuals to assess their insurance setup:
Collect Patient’s Insurance Information:
First things first: you need to get information from the patient. Since, the process of insurance verification isn’t always smooth sailing, considering this, you must allow yourself ample time to complete the process.
The information might include the patient’s name, DOB, name of the insurance company, name of the primary insurance plan holder, policy number or group ID number, and insurance company’s phone number and address.
Contacting the Company Before the Patient’s Initial Visit:
It is recommended to contact payers at least 72 hours before a patient’s initial visit because it may take some time. Eventually, this will ensure you have all the information you need long before the visits.
There are 2 ways of doing that. One is contact by phone and the second is searching online. Be prepared because you’ll be sitting on the phone for around 20 minutes.
Deploy Automatic Verification Services:
Now, for those who’d rather skip payer hold times and convoluted website pathing, the good news is there are digital solutions available. These will help you automatically verify patient benefits
Gather Benefits Information:
Once you have the payer representative on the line, it’s time to whip out a verification checklist and gather the must-know details. These details will help you side-step claim denials.
Conclusion
Remember, you hold the power with the insurance company, so in times of emergencies, don’t panic. The key is to stay persistent with the company to process the claims correctly. In essence, proper knowledge of how to handle dual insurance will save you time and hardship in the future.
Other than that, you shouldn’t be hesitant to ask questions.
Remember, your attention to detail and preparedness will go a long way in facilitating a hassle-free and efficient coordination of benefits process for you and your healthcare providers.
