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Primary, supplemental and secondary health insurance- what’s the difference?

PRIMARY HEALTH COVERAGE
When it comes to supplemental and secondary health insurance coverage the first rule to remember is that neither replaces a primary health insurance policy. Think of your primary health insurance policy as your foundation coverage, providing coverage for your normal medical bills. A primary health insurance policy will typically make payments directly to your health provider. For example, let’s say Mary has a primary health insurance policy. Mary goes to the hospital for surgery. Her primary health insurance provider will cover 80% of her surgery bill after she meets her deducible. After Mary’s surgery, her health insurance provider files a claim for Mary’s surgery. Her primary health insurance company would pay the provider for 80% of the bill and Mary would be responsible for the rest. 

SECONDARY HEALTH COVERAGE
A secondary health insurance policy is an additional health insurance policy that also typically makes payments directly to a health provider. A secondary health insurance policy  may cover the remaining medical bills that a primary policy doesn’t cover. This may occur for example when a husband and wife utilize their employer’s health benefits to cover both of them. Each spouse would end up with their primary health insurance policy (provided by their employer) and a secondary health insurance policy (provided by their spouse’s employer). Here’s an example of how this might work for Mary. Let’s say Mary has a primary health insurance policy and a secondary health insurance policy when she goes to the hospital for surgery. Her health provider would first file her surgery claim with her primary insurance company. If her primary insurance company only covered 80% of the cost of the surgery, the claim may then be filed with her secondary health insurance company. Depending on her coverage, the secondary policy may pick up the tab for the remaining 20% of her bill. If there were a portion of Mary’s bill that was not covered by both her primary and secondary policies, this would then become Mary’s responsibility.

SUPPLEMENTAL HEALTH COVERAGE
Supplemental health insurance is very different from a primary or secondary health insurance policy. Supplemental health coverage helps pay for your out-of-pocket medical expenses regardless of what your primary or secondary insurance covers. For example, a supplemental policy may pay a policyholder a lump sum if they are ever hospitalized or require surgery. The patient is therefore free to use these payments however they wish, including covering  living expenses while they are out of work due to a medical condition. Using the example above, let’s say after Mary’s surgery she was out of work for 2 weeks recovering. She has a supplemental health insurance plan that pays her out $1,000 every time she requires surgery. Therefore, after Mary’s surgery she files a claim to her supplemental health insurance company and they send her a check for $1,000 which she decides to use to cover her lost wages while she is out of work recovering.

So would you benefit from a supplemental or secondary health insurance coverage? As with any type of additional insurance coverage, many different factors must be weighed to determine whether it is appropriate for each person. What is the additional cost in premiums? Does it outweigh the coverage available in the event you need it? Do you ever really know when a major medical event is going to occur? Your best bet is to talk to a licensed health insurance professional who can outline all of your options.

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