What Does Secondary Insurance Cover?

Not every health insurance plan covers all the medical services you need. Secondary insurance policies help cover the costs of medical expenses your primary insurance does not pay. The purpose of secondary insurance is to reimburse you for the costs you pay out-of-pocket. Being covered by two insurance policies instead of one can be worth the extra cost, especially if you have recurring medical expenses.

Two Different Policies

• A primary insurance policy covers most of the medical services you receive. If you are covered by a policy your employer provides, it is a group policy that normally can't exclude you from coverage because you have a pre-existing medical condition. Your family may receive coverage for an increased premium rate. Doctor and hospital bills must be submitted first to the primary insurer for payment. Secondary insurance is an additional health insurance policy you buy to pay for medical expenses that your primary insurance does not cover. Some primary health plans do not pay fully for certain medical procedures or they place a dollar limit on how much they will cover each year.

The Primary Insurer

• It is possible for people to be covered under two health insurance plans. This usually occurs when both spouses work and each receives employer-sponsored health insurance as an employee benefit. As a rule, the primary coverage for each spouse is the insurance plan offered by that individual's employer. Secondary coverage may be available through the other spouse's health plan. Each spouse must be enrolled in a group health plan that covers other members of the family, as individual health insurance plans do not provide coverage for others. Being covered by two plans costs more, therefore, make sure the benefits are worth the expense. Inform each insurance provider of your coverage so that the two health plans can coordinate your benefits accordingly.

Cost

• The cost for secondary insurance is usually cheaper than what primary insurance coverage costs. Because you don't use secondary insurance as often or use it to cover the majority of your medical expenses, it often costs less to buy the additional coverage. Secondary insurance is designed to reimburse policyholders for medical expenses not covered by a primary plan. The two insurances work together to pay your medical bills. Although the purpose of a secondary insurance policy is to help cover excessive medical bills, like primary medical insurance, secondary insurance can place caps on how much the company will pay out. Be sure you know the extent of coverage you are buying.

Medicare

• Secondary insurance is often associated with insurance coverage seniors need to buy in addition to Medicare. Having additional insurance prevents Medicare beneficiaries from having to pay significant medical expenses out-of-pocket. Medicare does not cover all doctor visits or outpatient surgeries. If Medicare is your primary health insurance, Medicare pays its portion of covered services first. Your Medicare supplemental insurance then pays its share of the remaining balance. Supplemental insurance generally pays medical expenses that include co-payments, annual Medicare deductibles, preventive care and other medical services not covered by Medicare.