What Are the Benefits of Having Primary and Secondary Medical Insurance?

Adequate medical coverage may require two plans.

Adequate medical coverage may require two plans.

One medical insurance plan does not fit all. Some have high deductibles; others restrict you to in-network providers or reduce out-of-network coverage. To avoid a financial nightmare from high medical expenses, you can purchase additional health insurance either through your spouse's group plan or independently. Having more than one medical plan creates what the National Association of Insurance Commissioners calls "coordination of benefits," or COB. COB, or "other coverage," as nongroup policies prefer to call it, establishes an order of claim payment that prevents duplicate payments.

Primary Primer

Which of your plans is your primary plan affects claim payments. The COB rules followed throughout the insurance industry consider a group policy through your employer to be primary. If you have COBRA insurance plus another plan, the non-COBRA plan becomes primary, as does the plan you've had for the longest time, should a coverage dispute arise. The rules become more involved for children and custody-agreement situations. Your auto policy serves as the primary medical plan with your group insurance plan stepping in as secondary coverage once you reach the auto policy's per accident medical expense limit.

Lower Cash Outlay

Paying for two health insurance plans may save you money. Your primary plan's benefits apply to a medical claim first. If the claim exceeds the amount the primary plan pays, your doctor submits it to the secondary plan, which then pays all, or some of the balance, depending on its rules. For example, when the primary plan only covers $80 of a procedure that costs $100, the secondary plan would pay the difference, saving you $20 in out-of-pocket expense. However, if the secondary plan's policy caps that same procedure at $90, it only pays the $10 difference between its cap, $90, and what the primary plan paid, $80.

Fill Coverage Gaps

Secondary medical insurance can cover services your primary coverage excludes, such as emergency room visits or chiropractic treatment. When your employer doesn't offer a vision or dental plan, being a dependent on your spouse's work plan, or purchasing vision or dental insurance, gives you secondary coverage to care for your eyes and teeth. Comparing the services each plan covers against your needs and requirements for co-pay and deductibles can help you select two plans that make sense for you.

Claims Processing

Participating in two medical plans may provide more financial security, but it also may require you to handle more paperwork and forms. Should your primary plan send you a notice that it denied a claim, you have to provide the secondary plan a copy of the denial letter before it will cover the unpaid medication or service. You also have to carry two sets of cards to present to your health care provider. To avoid claim-processing delays, you need to keep both plans informed of any changes in your plan selection and personal data.


About the Author

Trudy Brunot began writing in 1992. Her work has appeared in "Quarterly," "Pennsylvania Health & You," "Constructor" and the "Tribune-Review" newspaper. Her domestic and international experience includes human resources, advertising, marketing, product and retail management positions. She holds a master's degree in international business administration from the University of South Carolina.

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