Primary, Secondary, and Supplemental Health Insurance: What are the Differences?

Americans are entitled to have more than one health coverage plan. You can even get health plans from several insurance companies. And when you do decide to purchase more than one plan, you’ll have a primary insurance and a secondary insurance. Some people also have supplemental insurance, such as Medigap, on top of their health insurance policies. A lot of people think two insurance plans equate to double the benefits. Insurance providers have set up a system known as the coordination of benefits (COB) which provides rules/guidelines for determining which insurance company pays the different expenses incurred by the insured individual through hospital and doctor visits.

Types of Health Insurance

Distinguishing between your health insurance plans and how they work with one another can be a bit confusing. Hopefully, the information below will shed some light on this matter.

1. Primary: For people with more than one health insurance plan, one of them will be the primary payer. Usually, this is your employer-sponsored health insurance. Even if you buy comprehensive health insurance through your spouse, your own health plan will be the designated primary health coverage. The primary payer will pay your medical claim first, but only up to your policy’s limit.
2. Secondary: This is the insurance plan that pays the remaining portion of your medical claim. You’ll first submit your claim to your primary and then your secondary payer will cover the rest (up to the policy’s limit).
3. Supplemental: This type of health coverage is somewhat different from the first two we’ve discussed. You purchase it on your own as additional insurance to cover healthcare that is not provided under your primary plan. For most people, this would be vision care and dental care. Supplemental insurance will pay for deductibles, co-insurance, and co-payments. But it doesn’t replace your primary insurance. It only supplements any out-of-pocket costs you may incur.

Pros and Cons of Supplemental Insurance

One of the biggest benefits to having several health plans is extended coverage. This means when a portion of your medical claim isn’t covered by your primary insurer, then you can go to your secondary insurer who will pay for the rest of your claim. There are cases where certain medical tests are not covered by your primary policy so when this happens, you can still count on your second policy instead of having to pay for the tests/treatments with your own money. But before you decide to get supplemental or secondary health plans, you also need to take into consideration that with added coverage comes added costs. You pay for supplemental plans out of pocket. Make sure to weigh the pros and cons before you decide to purchase additional coverage.

Medicare and Medigap Plans

Medicare is an assisted health care plan provided by the government for individuals who are at least 65 years old or those who have certain disabilities (even if they’re under 65). If you are at least 65 years old but are still employed, then the COB will determine your primary and secondary payers. Generally, if your employer has fewer than 20 employees, then Medicare will be your primary and your group health insurance plan becomes your secondary. If your employer has more than 20 people working for them, then Medicare becomes your secondary. Once you retire (and qualify for Medicare), you can keep your former employer-sponsored coverage, also known as retiree coverage. It works like a Medigap plan, filling in the holes from your Medicare coverage. If both primary and secondary health coverage fail to cover all your medical costs, then you may want to consider getting a Medigap supplemental plan.If you have any questions or need assistance call 1 800-793-3803 now to speak to one of our agents. If you have any questions or need assistance call 1 800-793-3803 now to speak to one of our agents.