Benefits of Having 2 Health Insurance Plans

How Does Having More Than One Health Plan Work?

This illustration shows when someone might be covered by two health plans including adult children who are under age 26 and may have coverage through their parents and their employer or school, married couples or domestic partners who each have access to a health insurance plan through their employer, and children who have two parents that each have access to a health insurance plan.

The Balance / Bailey Mariner

Having access to two health plans can be good when making health care claims. Having two health plans can increase how much coverage you get. You can save money on your health care costs through what's known as the "coordination of benefits" provision. Here's what you need to know about using two health care plans and how it works.

What Is Coordination of Benefits?

When a person is covered by two health plans, coordination of benefits is the process the insurance companies use to decide which plan will pay first and what the second plan will pay after the first plan has paid.

As an example, if your spouse or partner has a health care plan at work, and you have access to a health care plan through work, your children could have coverage through both plans. Once the main plan pays, rather than having to pay the rest, you could see the second plan paying some of what you would have had to pay if you didn't have the second plan. You can use both plans to get the most out of your children's health care.

In some cases, one plan may provide better care in one area, like mental health coverage. The other plan may offer better coverage in some other area. You can get the best of two health plans when you combine care.

How Having Two Health Plans Works

When an insured person has two health plans, one is the main plan, and the other is the second one. In the event of a claim, the primary health plan pays out first. The second one kicks in to pay some or all of the costs the first plan didn't pick up. For example, if your first plan has a deductible or co-pay, the second plan may pay for that.

Should You Keep Two Health Care Plans? 

If you have access to two health care plans, you could end up paying less money out of your own pocket for things the first plan doesn't cover. This could include things like co-pays and deductibles.

Does a person with two health care plans get double benefits? Not exactly. Having two health plans does help cover any health care costs better through the coordination of benefits provision.

If you are thinking you will save money on health insurance by only having one plan, think about how combining care works and what health care costs you have before signing a health insurance waiver and giving up a second plan. If your plan through your own job is free, and your partner can add you to their plan for low cost, you should keep both plans.

Examples of how a person may have two health care plans:

  1. A child's parents each have access to a health plan at work. Children can be covered under both plans if the parents decide to include them.
  2. Married couples or domestic partners who each have access to a health plan through their job may put each other on their plans.

Understanding the Coordination of Benefits System

The health plan coordination of benefits system is used to ensure both health plans pay their fair share. When both health plans combine coverage in the right way, you can avoid a duplication of benefits, while still getting the health care to which you're entitled.

Health plans combine benefits by looking at which health plan of the patient is the main plan and which one is the backup plan. There are guidelines set forth by the state and health plan providers that help the patient's health plans decide which health care plan is the main plan and which one the second plan.

If you have two health plans, you may be asked to declare which one you want to name as your main plan. Take some time and do your research to decide which plan will work better as your main plan.

Once you've named one plan as your first plan, that plan will pay what is required of it without looking at what the second plan covers. Once the main plan has paid the costs it has to pay, the second plan will be used.

Your second health plan, unlike your first plan, can look at what health care service was provided to you by the main plan. The health care costs that are still due will then be looked at for payment under the second health care plan.

Reasonable and Customary Costs

There are some rules that health plan providers follow that could cause a person covered by two plans to still have to pay for some health care costs. One such area is the "reasonable and customary" amount.

Most health plans will only cover costs that are reasonable and customary. This means the health plan provider will not pay for any services or supplies that are being billed at a cost that is more than what is the usual charge for the treatment in the area where the treatment takes place.

You May Still Need to Pay Some Costs

Once your main plan pays the reasonable and customary amount on a health care service, there may still be a balance due. This could happen if the health care provider was charging more than what the main plan felt was reasonable and customary.

The second plan does not have to pay the amount the first plan did not pay if the charge is deemed out of the normal limit. The insured person could still end up paying out-of-pocket. This could still happen even if there are two health plans. What's more, neither health care plan will cover the cost of a service that is not covered under their health care plans. If both plans do not cover a certain test, for example, the second one doesn't have to pay after the first one denies the expense.

People with more than one health care plan should discuss with their health plan providers how combining plans will work with their plans. This way, they can see what health care coverage they can expect.