Secondary Insurance – Who Needs It?
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If you, like me, often wonder whether you can have multiple health insurance plans to ensure adequate coverage, you are in the right place. With healthcare costs soaring, it is obvious to look for ways to keep medical bills down. This is where secondary or supplemental health insurance comes into play.
Secondary health insurance is a crucial complement to primary health insurance, offering additional coverage and financial protection for individuals and families. While primary insurance acts as the primary source of coverage for medical expenses, secondary insurance bridges the gaps left by deductibles, copayments, coinsurance, and services not fully covered by the primary plan.
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What is secondary health insurance?
A secondary health insurance plan refers to a type of plan that supplements primary health insurance. When someone has primary health insurance, such as through their employer’s plan or a government program like Medicare, secondary health insurance can provide additional coverage for costs not fully covered by the primary insurance.
For example, if a medical procedure is only partially covered by the primary insurance, the secondary insurance may cover the remaining costs. Secondary insurance can also cover deductibles, copayments, and other out-of-pocket expenses that the primary insurance does not fully cover. It essentially acts as a backup or additional protection against medical bills.
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What does secondary health insurance cover?
Secondary health insurance typically covers costs not fully covered by primary health insurance. These can include:
- Deductibles. Some primary health insurance plans require policyholders to pay a certain amount out-of-pocket before the insurance coverage kicks in. Secondary insurance may cover some or all of these deductible costs.
- Copayments. Primary insurance plans often require policyholders to pay a fixed amount (copayment) for certain medical services or prescriptions. Secondary insurance may cover part or all of these copayments.
- Coinsurance. After meeting the deductible, many primary insurance plans still require policyholders to pay a percentage of the costs for covered services, known as coinsurance. Secondary insurance can help cover a portion of these coinsurance expenses.
- Out-of-network coverage. If a policyholder receives care from a provider not in the primary insurance plan's network, the primary insurance may cover only a portion of the costs. Secondary insurance may provide additional coverage for out-of-network services.
- Services not covered by primary insurance. The primary insurance plan may not cover some medical services, treatments, or prescription drugs. Secondary insurance may cover these expenses if included in its coverage.
- Medical services abroad. If someone with primary insurance travels internationally and requires medical care, their primary insurance may not cover it. Secondary insurance may offer coverage for medical services received abroad.
What does secondary health insurance not cover?
While secondary health insurance provides additional coverage beyond primary insurance, certain limitations and exclusions remain. Here are some common items that secondary health insurance typically does not cover:
- Services not covered by primary insurance. If the primary insurance plan does not cover a medical service or treatment, the secondary insurance is unlikely to cover it.
- Expenses exceeding primary insurance limits. If the primary insurance plan has maximum limits or caps on coverage for certain services, the secondary insurance may not cover expenses that exceed these limits.
- Services obtained without primary insurance approval. Some primary insurance plans require pre-authorization for certain medical costs or treatments. If the primary insurance does not approve these services, the secondary insurance may also deny coverage.
- Pre-existing conditions. Secondary insurance plans may have exclusions for pre-existing conditions, meaning they will not cover expenses related to health conditions before the secondary insurance coverage begins.
- Non-medical expenses. Secondary insurance typically does not cover non-medical expenses such as transportation to medical appointments, lodging, or meals.
- Duplicate coverage. Secondary insurance may not cover expenses already fully covered by the primary insurance plan.
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Who should get a secondary health insurance?
Secondary health insurance can benefit individuals or families who want additional coverage to supplement their primary health insurance. Here are some scenarios where getting secondary health insurance might be advantageous:
High out-of-pocket costs
If your primary health insurance plan has high deductibles, copayments, or coinsurance requirements, secondary insurance can help offset these out-of-pocket expenses.
Frequent healthcare needs
Individuals who require frequent medical care, have chronic conditions or anticipate upcoming medical expenses may benefit from secondary insurance to help manage the costs not covered by their primary insurance.
Limited coverage under primary insurance
If your primary health insurance coverage is limited to certain services, treatments, or medications, secondary insurance can provide additional coverage for those expenses.
Travelers
Secondary health insurance with coverage for medical services received abroad can be valuable for individuals who travel frequently or plan to spend an extended period in another country.
Retirees
Secondary health insurance can be useful for retirees with original Medicare as their primary insurance but want additional coverage for services not covered by Medicare or for expenses such as deductibles and coinsurance.
Families with dependents
Families with dependents, such as children or elderly relatives, may opt for secondary coverage to ensure comprehensive coverage for the entire family's healthcare needs.
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Primary vs secondary health insurance
Primary and secondary health insurance serve different roles in providing coverage for medical expenses. If you are confused and wondering which insurance to buy, here's a comparison:
Coverage
Primary health insurance is the main source of coverage for medical expenses. It is typically obtained through an employer-sponsored plan or government program (like Medicare or Medicaid) or purchased individually. Secondary health insurance provides additional coverage beyond what the primary insurance plan offers. It is intended to help cover costs not fully covered by the primary insurance.
Comprehensive vs. specific coverage
Primary insurance offers comprehensive coverage for various medical services, including hospital stays, doctor visits, prescription drugs, preventive care, and more. Secondary insurance may have specific coverage areas, such as covering deductibles, copayments, coinsurance, out-of-network services, or services not covered by the primary insurance.
Cost
As outlined in the insurance plan, policyholders are responsible for cost-sharing measures such as deductibles, copayments, and coinsurance. Secondary insurance provides extra financial protection against high out-of-pocket costs, especially for individuals with high deductibles or copayments.
Optional Coverage
While primary coverage is essential and highly recommended, secondary insurance is optional, a separate plan typically obtained separately from the primary plan. It can be purchased directly from insurance companies or through employers as voluntary benefits.
Coordination of benefits
In cases where a person has multiple insurance plans, the primary insurance is typically responsible for processing insurance claims before any secondary insurance is applied. Policyholders pay monthly premiums and may have additional out-of-pocket costs for secondary insurance. The benefits received depend on the specific coverage provided by the secondary insurance plan.
Pros and cons
Pros
- Increased coverage. Secondary health insurance provides additional coverage beyond what primary insurance offers, reducing out-of-pocket expenses for healthcare services.
- Financial protection. It can provide financial protection against high deductibles, copayments, coinsurance, and other out-of-pocket costs associated with medical care.
- Access to more providers. Secondary insurance may offer coverage for out-of-network providers, giving you more flexibility in choosing healthcare providers.
- Coverage for non-medical expenses. Some secondary insurance plans include coverage for non-medical expenses related to healthcare, such as transportation and lodging for medical appointments.
- Peace of mind. Knowing that you have additional coverage can provide peace of mind, especially for individuals with chronic conditions or frequent healthcare needs.
Cons
- Cost. Secondary health insurance typically comes with an additional premium, which can increase your overall healthcare costs. It's essential to consider whether the benefits justify the extra expense.
- Overlap with primary insurance. In some cases, secondary insurance may duplicate coverage provided by the primary insurance plan, leading to unnecessary expenses.
- Complexity. Managing multiple insurance plans can be complex, requiring careful coordination of benefits and understanding the coverage provided by each plan.
- Limited coverage. Secondary insurance may have limitations or exclusions, such as pre-existing condition exclusions or restrictions on coverage for certain services or treatments.
- Approval requirements. Secondary insurance may require pre-authorization for certain medical procedures or treatments, adding administrative burden and potentially delaying care.
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Companies offering secondary health insurance
Several insurance companies offer secondary health insurance plans. These companies may provide supplemental coverage directly to individuals or offer secondary insurance through employers or other group plans. Some well-known insurance providers that offer secondary health insurance include:
Aetna
Aetna offers various supplemental insurance plans, including Medicare Supplement and supplemental coverage for individuals and families. It offers three plan options: accidents, illnesses, and hospital stays.
Cigna
Cigna provides supplemental health insurance options, such as Medicare Supplement plans and supplemental coverage for dental, vision, and other healthcare needs. Cigna offers six types of supplemental plans, ranging from cancer insurance, stroke insurance, accident treatment insurance, and whole life insurance.
UnitedHealthcare
UnitedHealthcare offers supplemental insurance plans, including Medicare Supplement, dental, vision, and other supplemental coverage options. It has plans for individuals and families and offers customization as well.
Humana
Humana offers supplemental insurance plans for Medicare beneficiaries and supplemental coverage for dental, vision, and other healthcare needs. Humana has the most comprehensive supplemental plans, but the premiums can be slightly higher than those of the other companies.
FAQs
Who should get secondary health insurance?
Secondary health insurance can be beneficial for individuals or families who want additional coverage to offset out-of-pocket expenses not covered by their primary insurance. This includes people with high deductibles, frequent healthcare needs, or limited coverage under their primary plan.
What does secondary health insurance cover?
Secondary health insurance typically covers expenses such as deductibles, copayments, coinsurance, out-of-network services, and services not covered by the primary insurance plan.
What does secondary health insurance not cover?
Secondary health insurance may not cover expenses already fully covered by the primary insurance plan, services not covered by primary insurance, pre-existing conditions, or non-medical expenses.
Which companies offer secondary health insurance?
Several insurance companies offer secondary health coverage including Aetna, Cigna, UnitedHealthcare, Humana, Blue Cross Blue Shield, Aflac, and Colonial Life, among others.
The bottom line
Whether a secondary health insurance policy is worth the cost depends on your unique circumstances, including your healthcare needs, financial situation, and the coverage provided by both primary and secondary insurance plans.
Consider factors such as your anticipated medical expenses, the level of coverage provided by your primary insurance, the cost of premiums and out-of-pocket expenses for secondary insurance, and your tolerance for financial risk.
Evaluate the benefits and drawbacks of secondary insurance carefully, comparing them against your budget and healthcare needs. Ultimately, make an informed decision that aligns with your priorities and provides the financial protection and peace of mind you require. If you're unsure, seek guidance from a licensed insurance agent or financial advisor.
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