Can You Have Two Health Insurances – What Are the Benefits?

It is possible to have two health insurance policies in place at the same time. There are various circumstances under which having two health insurances would be suitable. For example, if you want supplemental coverage for services not covered in your primary health plan.

Aside from offering additional coverage, having two health insurance policies can provide financial protection in the event of unexpected medical expenses.

This article will explore the benefits and cons of having two health insurance policies, discuss how double coverage works, and provide tips for deciding which policy to use as your primary coverage.

Advantages of Having Two Health Insurance Plans

The following are the top advantages of having two health insurance plans:

Additional Coverage

The extent of coverage provided by both health insurance policies will depend on each policy’s specific terms and conditions. Generally, having two health insurance policies can provide more comprehensive coverage than a single one.

Coverage For Pre-Existing Conditions

Some insurance plans may not cover certain pre-existing conditions, but having a second policy can help you get your needed coverage.

Coverage While Traveling

If you frequently travel outside your insurance plan’s coverage area, having a second policy can provide coverage while you are away from home.

Access to More Providers

Having two health insurance plans can give you access to a wider network of healthcare providers, allowing you to choose the best provider.

Tax Benefit

If you have two health insurance policies, you may be able to claim a tax benefit for the premiums you pay for both policies. In the United States, you can generally claim a tax deduction for the amount you pay in health insurance premiums as long as your employer or another party does not reimburse you.

This means that if you pay for two health insurance policies, you may be able to claim a deduction for the premiums you pay for both policies.

There are limits on the amount of premiums you can claim as a tax deduction. For example, in 2021, the maximum amount of premiums you can claim as a tax deduction is limited to the amount of premiums exceeding 10% of your adjusted gross income (AGI).

Note that the tax exemptions for health insurance premiums vary depending on your type of insurance and your circumstances. It is always a good idea to consult with a tax professional or refer to IRS guidelines for the most up-to-date information on the tax treatment of health insurance premiums.

Disadvantages of Having Two Health Insurance Plans

Conversely, there are a few disadvantages to having two health insurance plans:

Increased Insurance Costs

In most cases, having two health insurance plans is more expensive as you have to pay premiums for both policies.

Managing Two Health Insurance Plans Can Be Difficult

Each health insurance plan has its own complexities. There is lots of paperwork involved for one policy, let alone two. You will also need to track usage for each plan and clearly understand the terms and conditions of both policies.

In addition, you will need to coordinate benefits between the two policies to ensure that you are receiving the maximum coverage. Otherwise, you may end up having a coverage overlap.

There Still May Be Gaps in Coverage

There may be gaps in coverage despite having two health insurance plans. For example, if one policy has a high deductible, you may need to pay for medical expenses out of pocket until the deductible is met. Or, you may have a pre-existing condition that is not covered in either of the insurance plans.

How Does Dual Health Coverage Work?

If you have two health insurance policies, one works as primary coverage while the other is secondary coverage. It is up to you to determine your primary vs. secondary plan.

Your primary coverage should be the policy that provides the most comprehensive benefits and covers most of your medical expenses. On the other hand, our secondary coverage should be a complementary policy that covers expenses not covered by your primary plan.

For example, if your primary insurance policy does not cover vision or dental care, you may want to consider a secondary policy that does.

Alternatively, if you have a high-deductible health plan as your primary coverage, you may want to consider a secondary policy that provides coverage for certain expenses before you meet your deductible, such as prescription drugs or preventive care.

Primary and secondary health insurance also determine how insurance plans pay for medical expenses.

Primary health insurance is the first insurance plan to pay for medical expenses. It is responsible for paying your medical bills up to the policy’s limits. If you have a high deductible health plan (HDHP) or a plan with limited coverage, your primary insurance may not pay for all your medical expenses.

Secondary health insurance is the insurance plan that pays for your medical expenses after your primary insurance has paid its portion. If you have a high deductible health plan (HDHP) or a plan with limited coverage, your secondary insurance may pay for some or all of your remaining medical expenses.

Example of Primary Health Insurance

Below are the most common options for primary health insurance:

• Employer-Sponsored Group Health Insurance: This type of insurance is provided by an employer and covers the employee and the employee’s dependents.
• Individual Health Insurance: It is purchased by an individual and covers only the policyholder.
• Medicare: It is a federal health insurance program for people 65 or older, as well as some younger people with disabilities.
• Medicaid: It is a federal and state health insurance program for low-income individuals and families.
• Tricare: This is a health insurance program for active-duty military personnel and their families.
• CHAMPVA: This is a health insurance program for dependents and survivors of certain disabled or deceased veterans.

Examples of Secondary Health Insurance

Some examples of secondary health insurance include:

• Gap Insurance: Gap insurance is a type of secondary health insurance designed to cover the difference between what your primary insurance policy covers and what your medical expenses actually cost. It is often used to cover the cost of high-deductible health plans.
• Medicare Supplement Insurance: This type of insurance is designed to supplement Medicare, a federal health insurance program for seniors and people with disabilities. Medicare Supplement Insurance can help cover costs such as deductibles, copayments, and coinsurance that Medicare does not cover.
• Disability Insurance: Disability insurance is a type of secondary health insurance that provides financial protection in the event that you become unable to work due to a disability. It can help cover lost wages and other expenses while you cannot work.
• Vision and Dental Insurance: Vision and dental insurance policies are types of secondary health insurance that provide coverage for dental and vision care expenses, respectively. These types of policies often have lower premiums than primary health insurance policies, but they generally have more limited coverage.
• Accident Insurance: Accident insurance is a type of secondary health insurance coverage that provides financial protection in the event of an accidental injury. It can help cover medical expenses and other costs associated with an accidental injury, such as lost wages and transportation costs.
• Prescription Drug Insurance: It is a type of insurance that covers the cost of prescription medications. It is often included as part of a primary health insurance policy but can also be purchased as a stand-alone policy.

Factors to Consider When Getting Two Health Insurances

Coordination of Benefits

Ensure that the benefits of each plan complement the other. Then, coordinate the benefits for maximum coverage. You may be responsible for filing claims for each plan.

It’s important to let both insurance companies know about your other policy. This will help ensure that your claims are processed correctly and that you receive maximum coverage from both policies.

Cost

Consider the cost of premiums for both policies and whether you will afford to pay them on time. Also, confirm if there are deductibles, copays, and other out-of-pocket expenses. If you can afford a more expensive primary plan that provides better coverage, it may be worth it in the long run if there are lower out-of-pocket costs.

Enrollment

Ensure you renew your insurance policies on time and keep up with premiums to continue enjoying the coverage benefits.

Network of Providers

When choosing your health plans, consider their network of providers. Ideally, you want a broader network of providers. However, if it is not possible, ensure that the preferred doctor or medical facility is within the network to avoid high out-of-network costs.

Coverage Limits

Carefully review the health insurance coverage limits of each plan, including any annual or lifetime maximums on benefits. You may want to choose a primary plan with minimal coverage limits to have more protection in case of a major medical event. Also, check if the plan has exclusions or limitations that could affect your coverage.

Conclusion

Having two health insurance policies or dual coverage can provide additional health care coverage and financial protection in the event of unexpected medical expenses.

However, it is important to carefully consider the costs and benefits of each policy and the coverage limits and exclusions to determine which policy should be your primary coverage and which should be secondary. Also, review your coverage regularly to ensure that you have the appropriate level of protection in place.