Can I Have Two Health Insurance Plans?

You can be on two health insurance plans, a scenario often referred to as having dual health insurance. This arrangement involves maintaining a primary plan and then a secondary one that can serve various purposes like supplementing Medicare gaps for seniors, offering additional dental coverage for adults or providing extra protection for children engaged in sports.

The nature of having multiple healthcare plans is fairly popular, with over 43 million people holding multiple plans in 2021.^[1] Learn how it works and the pros and cons of having two plans.

Key Takeaways Over 43 million people had multiple healthcare policies in 2021. Types of secondary insurance can include a separate healthcare policy, vision, dental, disability insurance and even a life insurance policy. Secondary insurance can be obtained by having private coverage and group coverage through work. You can also have secondary coverage if you’re listed on separate plans through both of your parent’s employee healthcare. Any secondary coverage you have can be canceled at any time.

What Are the Benefits of Having Two Health Insurance Plans?

Having dual health insurance means maintaining a "primary" plan and a "secondary" one. Secondary plans are commonly purchased as they reduce out-of-pocket costs. This dual approach is popular among seniors who buy Medigap to supplement what Original Medicare doesn't cover, such as copays and coinsurance.

Another compelling reason is the potential financial relief, where the secondary plan pays for healthcare services not covered by the primary. For example, adults might select a secondary plan for dental needs, while parents might obtain extra protection for their sport-inclined teenagers — coverage that can be excluded in the primary plan.

There's also an element of security. For example, if you’re employed through your job, coverage through a spouse or parent's plan acts as a safety net in case you lose your employee healthcare. Furthermore, dual plans can ensure richer benefits (more on this later) and uninterrupted coverage.

Pros and Cons of Having Two Health Insurance Plans

While having dual coverage does come with perks, there are some downsides to consider during enrollment.

Pros	Cons
Cost savings	Incomplete secondary coverage
Diverse cost-sharing rules	Administrative hassle
Wider coverage range	Multiple premiums
Safety net

Pros

• Cost savings: If the premiums are affordable, especially if partially covered by employers, dual plans from two jobs (perhaps yours and a spouse's) can save you on out-of-pocket costs.
• Diverse cost-sharing rules: If your primary plan covers 50% of a $200 procedure, you owe $100. But if your secondary covers 80% of the cost, it can pay the remaining 50% after your primary, saving you $100 out-of-pocket.
• Wider coverage range: Dual plans can offer varied service coverage. One might not cover acupuncture or a specific drug, but the other could, increasing the likelihood of your needs being met.
• Safety net: Having a secondary healthcare plan ensures you are still covered if for some reason you lose your primary coverage.

Cons

• Incomplete secondary coverage: The secondary plan might not cover all residual costs after the primary.
• Administrative hassle: Managing two plans means more paperwork, notifications and potentially slower claims processing. Every doctor visit requires presenting both insurance details.
• Multiple premiums: Having two health insurance plans means you’ll be paying two premiums and possibly two deductibles.

How Does It Work if You Have Two Health Insurance Policies?

When you hold two health insurance policies, determining which plan pays first (primary) and second (secondary) is determined by a process called coordination of benefits (COB).

Primary Insurance

Your primary insurance is the insurance that pays first up to its coverage limits. It can cover your basic medical costs like:

• Lab tests
• Doctors’ visits
• Prescription drugs
• Yearly exams
• Vaccinations
• Pregnancy care

Secondary Insurance

Once your primary insurance has paid its share, your secondary insurance covers part or all of the remaining bill. Secondary insurance is typically under a parent’s or spouse’s plan, or it can be a separate health plan that you purchased to extend your coverage which is often called supplemental coverage. Other possible examples include vision, dental, disability insurance or a life insurance policy.

How Do You Determine Primary and Secondary Health Insurance?

Determining primary and secondary insurance isn't up to you. Insurance carriers prioritize your primary plan when claims are filed. Once the primary is exhausted, the secondary plan usually covers the rest. The following chart goes over a few common scenarios determining primary versus secondary coverage.

Scenario	Primary Insurance	Secondary Insurance
You’re covered by your parent’s plan and your work plan[2]	Your work health plan	Your parent’s plan
You and your spouse have group healthcare plans[2]	Your employer’s plan	Your spouse’s plan
You’re covered by both of your parent’s plans[3]	The parent whose birthday comes first (“birthday rule”)	The parent whose birthday occurs second
You have health insurance and Medicaid[4]	Your health insurance	Medicaid, in most cases

Will There Be Out-Of-Pocket Costs if There Are Two Health Plans?

Though your secondary coverage may help to cover your primary’s copays, deductibles and coinsurance, it is not a guarantee that all of your costs will be paid for. This is especially true when you consider your policy’s limits. Once these are met, you will be paying out-of-pocket for any additional costs.

If your employer provides a health reimbursement arrangement (HRA), you can use that to pay for expenses not covered by either your primary or secondary plan. An HRA allows tax-free reimbursements for insurance premiums, annual deductibles and other eligible expenses up to a limit set by your employer.

Will I Be Penalized if I Cancel My Secondary Health Insurance Plan?

There won't be any penalties for canceling your secondary coverage. Once you've canceled it, though, you should continue your remaining coverage. If you're enrolled in an ACA marketplace plan, you have the flexibility to cancel it at any point.

However, this isn't the case for other insurance types, such as employer-sponsored group health insurance or Medicare Advantage plans. For these, you typically need to wait for specific enrollment periods or undergo a qualifying life event to make changes.

It's important to be cautious, however, as prematurely ending your health insurance without having another plan in place will leave you unprotected for a while.

Moreover, depending on your state, being without health coverage could result in a tax penalty. To ensure you're covered throughout the year, it's recommended that you secure a new policy before discontinuing your current one.

How To Add Secondary Health Insurance

Private insurance companies can offer secondary health insurance. When seeking insurance, it's prudent to gather quotes from several providers, typically three to five. Factors like your location, age, smoking habits, chosen plan and included dependents influence your premiums.

While navigating each insurer's procedures can seem overwhelming, tools like SmartFinancial simplify the process. By entering your health details and income once, you can quickly get tailored health insurance recommendations. Start your journey by providing your zip code and receive a free quote.