5 Tips for Navigating Dual Insurance Coverage
If you have more than one medical plan, your health insurance coordination of benefits can be confusing. Understanding the ins and outs of dual insurance coverage is a challenge for patients and providers.
Health insurance is currently a necessity in America. From a sore throat to a major illness to a severe accident, things happen. Patients need coverage to help avoid large medical bills. And providers rely on this system so they can receive payment.
Doug Fir Billing is here to help providers and their practices handle their medical billing. Reach out today to find out how we can serve your clinic or nonprofit agency as you navigate the world of insurance. When we help you, then you can help more patients.
Understanding Primary and Secondary Insurance as a Patient
Many people have more than one health insurance policy. Some common reasons for this include:
Spouses each have coverage through their employers.
Someone under age 26 has coverage through their work or spouse and their parents.
A laid-off employee has coverage as part of their severance package and begins receiving Medicaid benefits.
Dual insurance coverage can help patients save money, and providers get paid.
Your primary policy will consistently go toward your medical bills first. Then the secondary policy applies to any remaining balance, if applicable.
Dual insurance coverage can make your healthcare much more affordable.
But, how do you know which policy is primary? Your circumstances will determine this, and you may need to talk with your insurer to verify the details of your situation. Here are a few scenarios that show how the insurance industry determines which policy is primary.
You are a child covered by each parent separately. Your primary insurance is the one belonging to the parent with the first birthday of the year. If your mom has a birthday in April and your dad has a birthday in November, Mom’s policy is primary. It doesn’t matter which parent is older. This ranking of coverage is known as the birthday rule.
You are under age 26 and have coverage through your school or employment, as well as coverage through a parent’s policy. Your school or employer plan is primary. The parent’s insurance is secondary.
You and your spouse each have coverage through employment. Your plan will be primary for you, while your spouse’s policy is secondary.
A minor child has divorced parents. The primary plan comes from the parent with custody. If they have joint custody, the birthday rule applies.
You are under 26 and covered by both your spouse’s insurance and your parent’s policy. The spouse’s coverage is primary. The parent’s plan is secondary.
You have private health insurance as well as Medicaid. Your plan pays first, and Medicaid pays last.
Medicaid will always pay last when it is part of a dual coverage situation.
When you have double coverage for your medical care, the coordination of benefits can take some surprising twists. Here are five things to keep in mind as you navigate the process.
1. Tell Your Provider About Both Policies
One of the biggest problems in the coordination of benefits happens when a patient doesn’t tell their provider about both healthcare plans. This doesn’t happen due to sneakiness. On the contrary, it usually comes about because a patient thinks they’re eliminating unnecessary steps.
For example, let’s say you have Plan 1 and Plan 2, and you know that Plan 1 doesn’t cover mental health. You go to see a therapist and only give them the Plan 2 information because it’s the one with mental health coverage. This situation could go on for months or even years.
But then, maybe, you fall and hurt your ankle and need to go to urgent care for x-rays. You hand over all of your information for both policies, and the urgent care center calls them to determine which plan is primary.
Guess what? Now the insurance plans know about each other, and they know which is primary. Plan 2 can then go back and deny all the claims they had paid as if they were the primary coverage.
This situation can result in bills that are tens of thousands of dollars! And depending on when the services occurred, it may be too late to submit them to the primary as they should have been. You do not want that letter arriving in your mailbox.
Always tell your providers when you have dual insurance coverage.
Always provide the information for both policies and then let the provider and insurance companies take the next steps. This step is crucial even if you know that a practitioner is out of network for one of your plans. If the primary denies a bill, then the doctor can submit it to the secondary plan.
2. Your Primary Insurance Won’t Reduce Benefits
Whenever you have a medical expense, billing goes through your primary insurance first. The primary insurance provider doesn’t change their behavior or limit your coverage because you have an additional plan.
Rather, they pay what their policy covers. Then the secondary plan comes into play. Having dual insurance coverage doesn’t mean that the primary plan takes away your benefits because you have others in place.
Let’s look at an example.
You have a sore throat, and you see your doctor. They determine that you have strep throat and write a prescription. You accrue expenses for your office visit and your prescription.
Let’s say that Plan 1, your primary policy, has a $1000 deductible and covers 50% of prescription costs.
After the Plan 1 insurance is applied, you still have a bill for $200 from the doctor’s office. Plan 1 applies that amount toward your deductible. If your prescription is $20, the policy reduces your share to $10.
Double medical coverage can save you money on prescriptions.
Your secondary insurance, Plan 2, kicks in for any remaining balance. If Plan 2 covers office visits for a $20 copay, your $200 clinic bill goes down to $20. Plan 2 covers prescriptions with a $20 copay, so your expense at the pharmacy doesn’t change
Knowing the copays and deductibles for both of your policies is crucial to understanding how dual coverage will work for you.
3. Providers Do Not Receive Double Payments
When billing insurance, the healthcare provider requests payment for your care in steps. The first step is to bill your primary insurance. They will wait for your insurer’s response before sending bills for any remaining balance.
If you only had one plan, this is the point when you would receive a bill for a balance due. But when you have a secondary health insurance policy, they will receive this balance bill. Any remainder after they respond is your responsibility.
Your medical care provider does not bill both of your plans at the same time. And they do not get paid double when you have dual insurance coverage.
Their office will need to know which policy is your primary plan. They may ask you for details so that they can bill in the correct order.
4. You May Still Have Out-of-Pocket Costs
Even with two medical plans, you will still have some costs to pay.
Having dual insurance policies can save you money, but you should still expect to have some bills. Neither plan will cover more than the policy’s stated amounts. If Plan 1 and Plan 2 each require a $20 copay, you will be responsible for that payment.
Also, you will still need to pay the premiums. Your healthcare expenses can be applied to deductibles and out-of-pocket maximums for both policies. But your plans will never pay each other. Insurance premiums are not direct healthcare expenses. So one policy can’t pay the premiums of another policy.
5. Changes In Circumstances Can Shift Things Around
If you lose one of your insurance policies, the remaining coverage will continue to provide benefits. For example, if you age out of your parent’s plan but continue to have coverage through your school, you’re still fully covered. Or if you have Medicaid as secondary insurance and then lose your work-based coverage, Medicaid then becomes primary insurance.
Coordinate Your Benefits and Minimize Your Medical Bills
Dual insurance coverage can help lower your overall expenses and remove some of the burden of paying for medical care. Be sure to review the details of your policies and communicate with your providers for optimal outcomes.
And if you are a medical provider, clinic, or mental health practitioner and got this far, we’d love to connect. At Doug Fir Billing, we understand the value of your time. Outsourcing your medical billing is an efficient way to ensure accurate and timely submissions so that you get paid.
Reach out today to see how we can help streamline your billing process.