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2 health insurance policies = 1 headache

By Jay MacDonald ·
Saturday, June 19, 2010
Posted: 9 am ET

What’s better than one health insurance policy?  Why, dual coverage, of course, as typically happens when both spouses sign on for group coverage through their respective employers.

In theory, dual coverage should eliminate most out-of-pocket expenses; the primary insurer would typically pick up 80 percent, the secondary insurer (the spouse’s carrier) the remaining 20 percent.

But in practice, it doesn’t always work that way. Here’s a comment from one frustrated reader:

“I have a question that I have posed to insurance companies and providers and still do not understand the ‘answer’ I am getting. If husband and wife both have insurance and use an in-network provider why should there be any balance at all? Our EOB (explanation of benefits) will tell us we owe the provider nothing; but the provider will tell us that the discount provided by one insurance is more than what the secondary insurance would pay, vice versa; so we are left with a balance many times. Can you explain this? In years past this did not happen, and I've become resistant to pay these balances now.”

I called Erin Moaratty, chief special projects officer for the nonprofit Patient Advocate Foundation that helps patients navigate the health insurance system. Erin said that while dual coverage is great to have, it is by no means simple, nor does it automatically zero out your balance.

“My guess would be that the reason they are paying out-of-pocket is, if the normal in-network plan is an 80-20 split with that 20 percent falling to the secondary insurer, that 20 percent is not being paid in full. Perhaps the secondary insurer is only paying 80 percent of its 20-percent portion,” she says.

Here are a few other possible mix-ups:

  • Primary vs. secondary: It is up to the insured couple to notify both insurance companies to sort out which will act as primary insurer for each spouse. This determines the sequence of billing. Both companies must agree to the arrangement for it to work smoothly.
  • One network or two? Is the network provider a network provider to both insurance plans? If not, it could lead to disagreements among insurance companies. Some insurers won’t act as secondary if they feel the primary didn’t pick up their fair share of your medical bill.
  • Different plans: One spouse may have an HMO, the other a PPO. Depending on the contracts, the twain may never meet at $0.

Best bet? If you have group health care coverage through your employer, enlist the help of your human resources department. They may be willing to act as liaison with the two insurance companies to streamline the billing process and plug that leak in your wallet.

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Jay MacDonald
August 04, 2010 at 10:22 am

Thanks for sharing your experience with dual coverage, Rick. It does seem baffling that identical policies with the same insurer, plan and network could result in different coverage. I suppose that attests to the degree of complexity in dual coverage in general. A good rule of thumb is to try to find out who is primary and who is secondary with the insurers. It may not be possible in every case but in those that give you a choice, it would be a good idea to compare coverages both ways, with your policy as primary then as secondary, and choose for your primary the one that provides the best coverage for things you're likely to need most.

August 03, 2010 at 5:09 pm

Great information.

Me and my wife's ex carried dual insurance on our kids, and it's been a godsend for those unexpected ER visits right before payday, and coming up with a $100 copay was never a sure thing.

But we also have discovered some unexpected gaps like those cited here. Example: though the ex and I were covered by the same insurer, the same plan and the same network, his covered durable medical equipment at 50 percent and mine covered it at 80 percent. The result was a $1.56 balance for a sling from a broken arm, which seemed inexplicable until we had someone from the insurer explain it to us.

June 27, 2010 at 12:35 pm

Great information! A lot of people don't know what their insurance does for them. this is great to get more info about it