What Is Secondary Health Insurance?
Secondary health insurance is extra coverage, like dental, vision or critical illness coverage, that's not part of your main health insurance.
Find Cheap Health Insurance Quotes in Your Area
Secondary health insurance is an add-on policy that gives you more coverage or better coverage than what you already have. There are many types of secondary insurance plans. The best options for you will depend on what type of health care you think you'll need and the things your main policy doesn't cover.
What is secondary health insurance?
Secondary health insurance is a plan you get on top of your main health insurance.
Secondary insurance can help you improve your coverage by giving you access to more 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. For example, Medicare Supplement plans are a popular option for seniors. These plans help pay the costs left over by Original Medicare.
Most people have some kind of secondary health insurance. For example, a household that gets a primary insurance policy through an employer can add on secondary insurance for dental care if the primary policy doesn't cover dental work for adults. Parents can also add an accidental injury policy for their teenager who plays sports and may be injured in the coming year.
How does secondary insurance work?
If you have multiple insurance policies, there is a specific order in which the plans will pay for health care services.
- Your primary insurance plan pays first when you get most medical care. You may have to initially pay a portion of the bill, especially if you haven't met your deductible or have a copay.
- Your secondary insurance pays next, helping you address any remaining costs or providing coverage for things your primary insurance plan doesn't cover.
- You pay whatever is left. You're responsible for any remaining balance after your insurance plans have paid their share.
What types of coverage can you get?
There are multiple types of secondary health insurance plans. Some help with the costs of your main insurance policy by helping you pay for things like high deductibles or your share of the cost of a hospital stay. You can also get add-on plans that fill in gaps left by your primary policy, like covering vision or dental care.
Policies to offset health care costs
- Medicare Supplemental insurance: Also called Medigap, these supplemental plans can help cover services original Medicare does not. Plans can also help pay your out-of-pocket costs for deductibles, copays and coinsurance.
- Prescription drug insurance: Even if your primary insurance plan has 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 for covered illnesses or injuries, and you can use the payments to offset your out-of-pocket costs, such as deductibles and copays.
- Hospital indemnity: Similar to gap health insurance, hospital indemnity can give you cash 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. They usually pay you a lump sum if you have a heart attack or a stroke or are diagnosed with cancer.
- Accidental injury insurance: Policies can pay out after injuries such as broken bones and back injuries. You can use your benefits payment to offset medical costs, for insurance deductibles or for anything else.
Other coverage policies
- Vision insurance: These plans can help cover the cost of eye exams, treatments, eyeglasses and contact lenses.
- Dental insurance: A dental plan can cover dentist visits, including 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 debt obligations such as mortgages, car loans or credit cards.
- Life insurance: If you die, life insurance pays out benefits to family members or beneficiaries. 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 your deductible?
Yes, several types of secondary health insurance can be used to cover out-of-pocket expenses like deductibles and copays. These policies fall into two categories: those that give you a direct payment and those that work with your other insurance company and medical provider to lower how much you pay toward your deductible.
Gap health insurance, hospital indemnity, critical illness insurance and accident insurance usually pay you a lump sum of money. This cash can be used for anything, including out-of-pocket costs for deductibles for medical bills your primary insurance didn't cover. The funds can also be used for household expenses, such as mortgage payments, rent, credit card bills or even the monthly health insurance bill for your primary plan.
Medicare Supplement plans can also lower the amount you pay for deductibles or copayments. However, these policies work directly with Original Medicare to pay the cost of your health care. They don't send you a direct payment.
What's the best secondary insurance for seniors?
Plan G is the best Medicare Supplement plan, a type of secondary insurance, for most people. However, this plan has a high monthly rate. Plan N is another good option. It has good coverage but a lower monthly cost than Plan G.
Secondary health insurance is very common among seniors, and 4 in 5 Medicare beneficiaries age 65 or older have some form of supplemental coverage. There are several plans to choose from, and the best one for you will depend on your budget and health circumstances.
What's the best secondary health insurance for pregnancy?
The best supplemental health insurance for pregnant women includes short-term disability insurance and maternity leave plans, which can help replace lost income. A hospital indemnity plan can also be a good idea, so you can lower your out-of-pocket hospital costs for your delivery. 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 you know about before a policy begins. There could also be a waiting period that prevents pregnancy coverage in the first several months of a policy.
Can you get secondary health insurance for a child?
Yes, you can buy extra health insurance plans for children, including hospital indemnity, gap health insurance, vision insurance and more.
Children with two parents who have health insurance plans can have multiple health insurance policies, because they might be covered by both parents' plans. One 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.
What's the cost of secondary health insurance?
The monthly cost of secondary health insurance depends on the type of coverage and 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 $22 per month.
The cost of Medicare Supplement plans changes a lot depending on the plan you buy. Plan K is the cheapest option at $83 per month, on average. Plan C has the highest average rate, at $221 per month. Most people choose Plans G, F or N, which range in price from $121 to $199 per month, on average.
Can you get cheap secondary insurance?
Secondary insurance plans can be cheap, but it depends on the type of plan and the coverage. Cheaper plans probably don't have as much coverage as more expensive plans. Cheaper lump-sum plans probably don't have payouts that are as high as more expensive ones.
Combining secondary health insurance with a cheap traditional health insurance plan can help you pay less for your medical care overall.
When you're shopping for plans, compare multiple insurance quotes to 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 your spouse's plan.
How do you choose the best secondary insurance plan?
Just like there are multiple things to think about when choosing the best health insurance company, you should consider several things when picking a secondary plan.
Do you have gaps in your primary insurance coverage? Insurance policies with high deductibles, limited coverage or exclusions could leave you with high out-of-pocket expenses for your health care. The best secondary health insurance can 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.
How much medical care do you think you'll need? If you think you'll need a lot of medical care in the coming year, getting a secondary insurance plan can give you better coverage and lower your medical bills overall. Also consider the types of medical care you'll likely need, and get a policy that specifically addresses those concerns. For example, hospital indemnity can help you pay for in-patient hospital care, while gap health insurance may cover physical therapy.
Are there exclusions for preexisting conditions or something else? Many secondary insurance policies could have exclusions for age, tobacco use or preexisting conditions, because they don't have to follow the rules of the Affordable Care Act. Reviewing any exclusions can help you get the best benefit from your plan. For example, you might have to have a cancer insurance policy for a few months before you would be eligible to get a payout after a new cancer diagnosis.
How do the total health benefits compare to your monthly costs? It's a good idea to compare the cost of a secondary plan to how much benefit you'll get from it. That way, you know if it's worth it for your situation. Also consider what type of payment structure you prefer. Some policies pay you directly, often allowing you to use the money however you choose. Other policies issue payments directly to your doctor or other medical service provider, helping you avoid having to manage medical bills and payments.
Are there maximum amounts for coverage or payouts? Some policies have a maximum amount that can be paid during a policy year. Some also have a lifetime limit, which is the maximum that will be paid while you have the policy. For example, your coverage could be limited to five doctor visits per year or $100,000 paid to you for as long as you have the policy. Understanding the maximum amount a plan will pay can help you determine if the cost of the plan is worth it.
Frequently asked questions
What is secondary health insurance?
Secondary health insurance is a policy that adds extra coverage that your primary plan doesn't have. Secondary policies can fill gaps in your coverage, like vision and dental insurance do. They can also reduce the cost of health care, like how a hospital indemnity policy pays you directly if you have to stay in the hospital.
Can you have two health insurance plans at the same time?
Yes, it's common to have multiple health insurance plans. Dual policies can help cover more of your medical costs, so you pay less out of pocket.
Is there a downside to having secondary insurance?
Secondary health insurance plans have monthly rates. Even if it's cheap, having a secondary health insurance plan will always be more expensive than just having a primary plan. But it might be worth it for you if you think you'll use the benefits that the secondary plan offers. For example, dental insurance is worth it for most people because going to the dentist is common. But a hospital indemnity plan might not be right for you if you're healthy overall and you don't anticipate needing to go to the hospital.
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 coverage, including add-on policies like dental or life insurance. Among seniors who have Medicare, about 80% have a Medicare Supplement plan, a type of secondary insurance.
Methodology
Dental insurance rates are from public use files (PUFs) from HealthCare.gov. Rates are for a single 40-year-old with no children.
Medicare Supplement rates are averages from actuarial data for private insurance companies. The rates are for a 65-year-old nonsmoking woman who signed up for a policy when she was first eligible, when medical issues aren't used in pricing. Rates don't include Select plans or the unique plans sold in Minnesota, Wisconsin and Massachusetts.
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.