Health Insurance

Secondary Health Insurance: Guide to Coverage and Plans

Secondary Health Insurance: Guide to Coverage and Plans

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Secondary health insurance is an add-on policy that improves your insurance coverage or expands your insurance benefits. There are many types of secondary insurance plans, and the best options for you will depend on what type of health care you expect to need and the weaknesses of your primary insurance policy. Find out how secondary insurance works and how you can use these policies to improve your insurance coverage.

What is secondary health insurance?

A secondary insurance policy is a plan that you get on top of your main health insurance.

Secondary insurance can help you improve your coverage by giving you access to additional medical providers, such as out-of-network doctors. It can also provide benefits for uncovered health services, such as vision or dental.

These health plans can also help you pay deductibles and copayments for your primary health insurance. Medicare supplement plans are a popular option for seniors, helping to reduce the cost of medical services beyond what Original Medicare offers.

Secondary health insurance is more common than you may realize. For example, a household that gets a primary insurance policy through an employer can add on secondary insurance for dental care because the adults aren't covered by the primary insurance policy. The parents can also add on an accidental injury policy for their teenager who plays sports and may have an injury during the coming year.

How does secondary insurance work?

If you have multiple insurance policies, there is a clear order in which the plans will pay for health care services.

  • Your primary insurance plan pays first after you receive medical care, providing the coverage and cost sharing as specified in your policy.
  • Your secondary insurance pays second, helping you address any remaining costs or providing coverage for services that your primary insurance plan excludes.
  • You pay third and are responsible for any remaining balance or copayments after your insurance plans have provided cost-sharing coverage.

What types of coverage can you get?

The category of secondary health insurance includes multiple types of insurance plans. Some plans help with the costs of your primary insurance policy by addressing things such as high deductibles or the cost of a hospital stay. There are also secondary insurance plans that are add-ons providing a different type of insurance that's not covered by your primary policy, such as vision insurance or disability insurance.

Policies to offset health care costs

  • Medicare supplemental insurance: Also called Medigap plans, these supplemental plans can help cover services that are not covered by Original Medicare. Plans can also help pay your out-of-pocket costs for deductibles, copayments and coinsurance.
  • Prescription drug insurance: Even if your primary insurance plan offers some level of prescription drug coverage, you could reduce the cost of your medications with a stand-alone prescription plan, a drug discount plan or Medicare Part D.
  • Gap health insurance: Sometimes called limited benefits plans, these policies usually give you a lump-sum payment for covered illnesses or injuries, and you can use the payments to offset your out-of-pocket costs such as deductibles or copayments.
  • Hospital indemnity: Similar to gap health insurance, hospital indemnity can give you cash payments to offset your out-of-pocket costs for hospitalizations and intensive care.
  • Critical illness or cancer insurance: These plans can help you manage the high cost of major illnesses with benefits paid for situations such as a heart attack, stroke or hospital stay.
  • Accidental injury insurance: Policies can give you a cash payout after injuries such as broken bones and back injuries. You can use your benefits payment to offset medical costs, insurance deductibles or for anything else.

Additional coverage policies

  • Vision insurance: These plans can help cover the cost of eye exams, treatments and corrective eyewear including eyeglasses and contact lenses.
  • Dental insurance: A dental plan can cover dentist visits, include preventive dental care and reduce the cost of major dental services or orthodontia.
  • Disability insurance: If you become unable to work, disability insurance can help cover part of your lost income or can help cover debt obligations such as mortgages, car loans or credit cards.
  • Life insurance: Policies can pay out benefits for family members or beneficiaries if you pass away. Some life insurance companies allow you to use benefits to help cover the costs of end-of-life medical care.

Can you use secondary insurance to cover a deductible?

Yes, several types of secondary health insurance can be used to cover out-of-pocket expenses such as deductibles or copayments. These policies fall into two categories: those that give you a direct payment and others that work with your other insurer and medical provider to reduce how much you pay toward your deductible.

Gap health insurance, hospital indemnity, critical illness insurance or accident insurance usually provides a lump-sum cash payout for covered services. These funds can be used for anything you want including out-of-pocket costs for deductibles or uncovered treatments. The payouts can also be used for standard household expenses such as mortgage payments, rent, credit card bills or the monthly health insurance bill.

Medicare supplemental plans can also reduce the amount you pay for deductibles or copayments. However, these policies work directly with your Original Medicare plan to pay the cost of your health care. They don't issue you a direct payment for a covered service.

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senior couple

What's the best secondary insurance for seniors?

Our 2021 pick for the best Medicare supplement plan for new enrollees is Plan G. However, this comprehensive plan has a high monthly premium. The full list of the best Medicare supplement plans also recommends Plan K for seniors on a budget. However, some seniors with this plan could end up with high out-of-pocket costs because there is only 50% coverage for services like skilled nursing.

Secondary health insurance is very common among seniors, and 4 in 5 Medicare beneficiaries aged 65 and over have some form of supplemental coverage. There are several plans to choose from, and the best plan for you will depend on your budget and health circumstances.

pregnant mom

What's the best secondary health insurance for pregnancy?

You can reduce the cost of your pregnancy by signing up for supplemental health insurance for pregnant women. Options include short-term disability insurance and a maternity leave plan, which can help replace the lost income. Plus, a hospital indemnity plan can reduce your out-of-pocket hospital costs by giving you a direct cash payment for covered situations. The best policy for you will depend on your specific needs.

Many secondary insurance plans consider a pregnancy to be a preexisting condition and will not provide coverage for pregnancies that are known before a policy begins. There could also be a waiting period that prevents pregnancy coverage in the first several months of a policy.

dad playing with child

Can you get secondary health insurance for a child?

Yes, you can also purchase additional health insurance plans for children including hospital indemnity, gap health insurance, vision insurance and more.

Children can also have multiple health insurance plans because they're covered by both of their parents' plans. One of the insurance plans will be considered primary, and the other will be secondary.

Coordinating benefits usually uses the "birthday rule." The parent whose birthday falls first in the calendar year would provide the child's primary insurance policy, and the other parent's plan would be the child's secondary insurance plan, contributing to any remaining health care costs after the first policy is used.

What's the cost of secondary health insurance?

Secondary health insurance can cost anywhere from $5 per month to hundreds of dollars per month, depending on the type of coverage and the level of support the plan provides.

Add-on plans can be an affordable way to fill in coverage gaps. For example, the average cost of dental insurance is just $10 per month, and vision insurance usually costs about $15 per month.

The cost of Medicare supplement plans has the biggest range because of the variety of plans and coverage options. Low-cost plans such as Plan K start at just $62 per month, and other choices such as Plan A or Plan B can cost more than $700 per month.

Can you get cheap secondary insurance?

Yes, cost-conscious consumers can use a low-cost secondary insurance policy to save money on medical care and reduce total medical costs. Secondary plans can be as affordable as $5 per month or $50 per month.

Combining secondary health insurance with a cheap health insurance plan can help you pay less for broad coverage that would be more expensive if you purchased only one plan.

When selecting your plans, comparing multiple insurance quotes can help you get the best deal on a policy that gives you the coverage you want for your situation. You may even qualify for secondary health insurance through your employer or with your spouse's plan.

How do you choose the best secondary insurance plan?

Just as there are multiple considerations when choosing the best health insurance company, asking yourself the following questions can help you choose the best secondary health insurance policy.

  1. Do you have gaps in your primary insurance coverage?

    Insurance policy issues such as a high deductible, limited coverage or exclusions could leave you with high out-of-pocket expenses for your health care. The best secondary health insurance will help you fill in the gaps of your main insurance policy without causing you to double up on insurance coverage, helping you pay less for health care overall.

  2. How much medical care are you expecting?

    If you are expecting to need significant medical care in the coming year, getting a secondary insurance plan can strengthen your coverage and give you more support for out-of-pocket medical expenses. Also consider the types of medical care you are likely to need, and get a policy that specifically addresses those concerns. For example, hospital indemnity can help you pay for in-patient hospital care, and gap health insurance may cover physical therapy.

  3. Are there exclusions for preexisting conditions or something else?

    Many secondary insurance policies do not have to follow the rules of the Affordable Care Act, and policies could have exclusions by age, risk level or preexisting condition. Reviewing any exclusions can help you get the best benefit from your plan. For example, you may have to carry cancer insurance for a period of time before receiving coverage for a new cancer diagnosis.

  4. How do the total health benefits compare to your monthly costs?

    You'll get the best deal by considering how much you would pay for the policy versus the potential cost savings you could receive on health care. Also consider what type of payment structure you prefer. Some policies pay you directly, often giving you the freedom to use the money in whatever way you choose. Other policies issue payments directly to your doctor or medical service provider, helping you avoid having to manage medical bills and payments.

  5. Are there maximum limits on coverage or payouts?

    When choosing a policy, check the maximum amount that could be paid during the policy year and whether there are lifetime limits. For example, your coverage could be limited to five doctor's visits per year or a certain number of outpatient services. Understanding the maximum amount that a plan will pay can help you determine if the amount you are spending for the plan is worth it.

Frequently asked questions

What is secondary coverage for health insurance?

Secondary health insurance policies can fill in any coverage gaps, such as vision coverage, and available policies can also reduce the cost of health care services, such as hospital indemnity to help you cover the cost of hospital care.

Can you have two health insurance plans at the same time?

Yes, it's common to have multiple health insurance policies, and dual coverage can help cover more of your medical costs so that you pay less out of pocket.

Which insurance companies offer secondary health insurance?

Plans are available from Blue Cross Blue Shield, USAA, AARP, UnitedHealthcare, Aetna, Aflac, Alliance, Humana, Cigna and more.

Is secondary health insurance worth it?

Secondary health insurance can give you financial protection if your main insurance policy has limitations. Most people have some form of secondary health insurance to support their total insurance coverage, including add-on policies like dental insurance or life insurance. Among seniors who have Medicare, about 80% have a Medicare supplement plan.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.