Secondary Health Insurance: What Is It? (2024)

You can have multiple health insurance plans at the same time. The two insurance companies work together through a system called coordination of benefits that decides which plan pays first and which one is considered secondary insurance.

Having two health insurance plans can help lower out-of-pocket costs, but it may also lead to double premiums and deductibles and make the health insurance claims process more confusing.

What Is Secondary Health Insurance?

Secondary health insurance is the second health plan when you have more than one health insurance plan. Secondary health insurance can be a way to improve coverage, for instance adding a second health plan may provide access to doctors outside of the network in the first plan.

When you have multiple health insurance plans, the companies work together to determine which plan pays first and which one pays second. This process is called coordination of benefits, which dictates primary and secondary insurance. The primary and secondary insurer varies by type of health insurance, and your state and employer can also influence that process.

Coordination of benefits assures health insurance companies that they don’t pay for more than 100% of the total medical costs.

How Does Secondary Insurance Work?

The primary and secondary insurance process works this way:

• The health care provider files the claim with the primary health insurance company. That health insurer reviews the claim and pays according to the plan’s benefits and coverage.
• The secondary health insurance then reviews the claim, what’s been paid by the primary insurer and contributes its portion of payment based on its benefits and coverage.
• The health care provider bills you for what’s remaining after the two insurance companies pay their share.

Coordination of benefits determines the primary and secondary health insurance. These rules may vary by type of health plan, employer and state, but generally, this is how primary and secondary insurance is decided:

How coordination of benefits works

Who Can Have Secondary Insurance?

Secondary health insurance is available to anyone eligible for multiple health insurance plans.

Some examples of when you may be eligible for multiple health insurance plans are:

• You’re eligible for health insurance through your job and your spouse’s employer-sponsored health insurance plan.
• You’re under 26 and qualify for a health plan through your employer and you’re also on your parents’ health plan.
• You have both health insurance and a workers compensation insurance claim.
• You have a private health insurance plan and are eligible for coverage through a veterans administration (VA) plan, Medicare, Medicaid or another type of coverage.

What Does Secondary Insurance Not Cover?

What a secondary insurance plan may not cover varies by the specific health plan. That’s why it’s critical to understand what each health plan covers and what it excludes.

You also want to ensure you get care from in-network providers only. Some health plans like health maintenance organization (HMO) and exclusive provider organization (EPO) plans don’t typically cover any out-of-network services unless it’s an emergency.

Having a provider considered in-network in one plan and out-of-network in the other complicates the health insurance. It will likely require you to pay more for health insurance services since one insurer will pay at the lower out-of-network rate or won’t pay at all.

Multiple insurance plans also mean you likely have two premiums, deductibles, coinsurance and out-of-pocket costs. A second health plan won’t help pay those primary health plan costs.

How Much Does Secondary Insurance Cost?

It costs an average of $928 on average per month for a Bronze health insurance plan on the Affordable Care Act (ACA) marketplace. The marketplace is where you can buy a health insurance plan for yourself or your family if you don’t have health insurance through work.

The average health insurance costs for a Silver plan is $1,217 monthly and $1,336 for a Gold plan.

The exact cost of an ACA plan differs by multiple factors, including age, location, company, metal tier and type of benefit design.

Here are the average costs for an ACA plan by age.

ACA plan costs by age

Is Secondary Insurance Worth It?

Secondary health insurance can help reduce out-of-pocket costs, but having multiple health plans isn’t always a great situation. Paying two premiums and deductibles and juggling two provider networks and health plan benefits may be costly and a health insurance headache.

On the flip side, a secondary health insurance plan with little to no health insurance premiums, a low health insurance deductible, generous coinsurance rates and a wide provider network may be worth it.

For instance, if you see an out-of-network provider on your primary plan, you would not be covered for the associated costs unless your plan covers out-of-network treatment. But if that provider is in-network on your secondary plan, you would be covered according to the plan’s benefits for in-network care. This is one scenario in which secondary insurance is worthwhile, says Cyndee Weston, executive director of the American Medical Billing Association.

How Do You Decide on a Secondary Insurance Plan?

If you’re eligible for two health insurance plans, you need to decide whether a secondary plan makes sense for you. Here’s what to consider when deciding on whether to choose a secondary health insurance plan.

Consider the plan’s premiums

Secondary health insurance may require paying two health insurance premiums. That may not make a secondary health plan worthwhile.

But if your option has little to no premiums and a low deductible, having multiple health insurance plans may be worthwhile.

Think about your health needs in the coming year

Multiple health plans can help reduce out-of-pocket costs, especially if you expect to need health care in the coming year.

For instance, if you’re expanding your family or expect to need costly surgery in the coming year, a secondary health plan can help offset those out-of-pocket costs.

Check for your providers in both plans’ networks

Staying in a plan’s provider network can save you money. Ideally, your providers and hospitals will be considered in-network on both plans to ensure you reap the maximum coverage at the lowest cost.

If you have a provider that is not in-network for your primary plan, try to find a secondary plan that does include the provider in its network. That way your secondary plan acts as a safety net that provides in-network benefits.

Check out-of-pocket costs and maximums

Health insurance plans have out-of-pocket costs and plan maximums. Check out that information to figure out how much you may have to pay for deductibles and coinsurance on both plans.

Which Health Insurance Companies Offer Secondary Plans?

Any health insurance company may offer plans that could be considered secondary health plans based on your plan eligibility.

Top health insurance plans include:

• Aetna
• Cigna
• Kaiser Permanente
• Oscar
• UnitedHealthcare

Can You Choose Which Plan Is Primary and Which Is Secondary?

No, you can’t choose which plan is primary and which is secondary. That’s where the coordination of benefits sets the rules.

The coordination of benefits also makes sure that health insurance companies don’t pay double for the same services.

Types of Supplemental Health Insurance

Beyond health insurance, companies also offer supplemental insurance that goes beyond standard health insurance. People sometimes use the term “secondary insurance” for supplemental insurance, too, or they may call it gap health insurance.

Here’s a look at supplemental health insurance options.

Vision insurance

Vision insurance, which can be part of a health insurance plan or a separate policy, offers help paying for vision care, such as exams, glasses and contact lenses.

Companies that offer vision insurance include:

• Ameritas
• Direct Vision
• EyeMed
• Humana
• VSP

Dental insurance

Dental insurance helps offset the costs of dental care and is often separate from a health insurance plan.

Dental insurance policies vary by costs, deductibles, coverage maximums and waiting periods. For instance, some dental plans only cover preventive services, while others help with preventive, basic and major care and may even pay a portion for braces, dental implants and dentures.

Dental insurance companies include:

• Ameritas
• Anthem
• Delta Dental
• Guardian Direct
• Humana
• Spirit Dental

Disability insurance

Disability insurance pays a portion of your lost wages if you become ill or injured and can’t work. These policies may offer short-term or long-term coverage and you may be able to buy individual plans directly from companies or get coverage through an employer.

Disability insurance companies include:

• Assurity
• Guardian
• Mutual of Omaha
• Northwestern Mutual
• Unum

Life insurance

Life insurance provides a death benefit to your beneficiaries when you die as long as the policy is in force.

Life insurance policies can be term life insurance, which offers coverage for a period, and permanent life, such as whole life insurance, which stays in effect as long as you make payments throughout your life.

Life insurance companies include:

• AIG
• AXA Equitable
• John Hanco*ck
• Lincoln Financial
• Mutual of Omaha
• Nationwide
• Northwestern Mutual
• Pacific Life
• Penn Mutual
• Protective
• Prudential
• Transamerica

Insurance Policies That Offset Health Care Costs

There are also insurance policies that may help you pay health care costs.

Accidental death and dismemberment insurance

Accidental death and dismemberment insurance, also called AD&D, offers coverage if you die in an accident or lose a limb or function like sight or hearing. Insurance companies provide a lump-sum payment following a covered incident that you can use in any way that you want.

Cancer insurance

Cancer insurance provides payment if you’re diagnosed with cancer. This coverage is supplemental coverage that provides money for you that you can use for any reason, including health care costs, mortgage payments or electricity bills.

Critical illness insurance

Similar to cancer insurance, critical illness insurance provides payment if you’re diagnosed with a critical illness. You can use the money for any reason.

Hospital indemnity

Hospital indemnity insurance, which is generally supplemental coverage to health insurance, pays a fixed amount directly to the policyholder if the person is hospitalized.

There are no limits to how you can use that money. You can use hospital indemnity payments to cover a health plan’s deductible and coinsurance or for transportation, medication, rehab or home care costs.

Long-term care insurance

Long-term care insurance helps if you need long-term care down the road, such as adult day care, nursing home stays and help with activities of daily living like dressing and eating.

Secondary Health Insurance FAQs