If you have current healthcare benefits, we show you affordable options to pay some of your out-of-pocket expenses. Secondary medical insurance coverage fills needed gaps that your primary plan does not cover, and is separate from other benefits. Rates are actually much lower than most consumers expect, and there are many supplementary benefits that can be utilized for this add-on policy. Any quotes provided by our website are free (of course) and we research all reputable companies that offer this type of coverage.
By expanding your benefits, your out-of-pocket costs, including deductibles and copays, may reduce. Vision, dental, accidental injury, and healthcare plans are offered that provide this type of coverage. Cash may also be paid, depending upon policy provisions. Disability, cancer, Senior Supplement, and accident coverage can provide timely assistance.
Many plans allow you to choose your own doctors, hospitals, and other medical facilities for health, dental, or vision coverage. Coordination of benefits is sometimes possible when you have multiple policies. However, generally, you are not permitted to own two separate primary healthcare plans, regardless if they are from different carriers. When other plans stop paying covered expenses, additional policies can begin to help you pay those bills. These types of contracts can be easily customized to fit the budget and medical conditions of each person to be covered. Once the secondary coverage has paid all of its benefits, you may have out-of-pocket expenses to pay.
What Is It?
Secondary medical insurance is designed to reduce out-of-pocket costs that you pay when you have your primary benefits in place. For example, if you have a group policy through your employer, you pay for a private individual or family policy through an insurance company. If you have reached age 65 or become eligible for Medicare, then you have primary coverage. COBRA, CHIP and Medicaid policies are also considered to be your main benefits. Currently, there are no deductible medical plans that are available that eliminate some of the need for secondary benefits. However, these plans often have coinsurance (see below).
More than likely, you are not covered for 100% (0% coinsurance) of your expenses. If you have a $20,000 hospital bill, you my have to pay from $500 to $8,700. If the bill is $100,000, your portion may increase, depending if you have an ACA-compliant plan. Even with a covered office visit, ER visit, outpatient surgery, or a basic outpatient procedure, you may have to pay some of that obligation. Dental and vision coverage may also leave gaps, especially for non-preventative expenses. Orthodontia is typically not covered or limited with most plans, and cosmetic expenses are typically not covered.
Secondary health policies pay the gaps and out-of-pocket expenses not covered by your “primary” policy. Initial claims should always be filed first with primary coverage. You can easily customize benefits to closely work with your main contract. Thus, you’re not paying for items that are either very inexpensive, or automatically paid by your private or group Exchange plan. Depending on the type of plan, cash benefits can be paid directly to you. These funds can be used for many types of out-of-pocket expenses you incur. Payments may also be based on proof of specific surgeries or procedures, and documentation is required.
Deductibles, Copays, And Coinsurance
Deductibles, copays, and coinsurance can also be paid or reimbursed. Specific “per-day” dollar amounts can be designated to pay for specific illnesses and conditions. Daily cash payments may also be paid per chronic illness or per the number of days in the hospital. Note: Typically, you may own a primary and secondary plan, but not two primary contracts. For example, if you are provided group benefits though an employer, there is no reason to purchase a private Marketplace plan through a State or Federal Exchange. Likewise, if you are covered through Medicare or Medicaid, an Exchange plan will not be offered.
If you have an ongoing illness that is treated every year, the medical expenses will also need to be paid. And it’s possible that these will be bills that continue each year. With constant breakthroughs in the treatment and early diagnosis of diseases, our life expectancy is increasing, and a large percentage of the elderly are treated for chronic illnesses. Long-term care policies can often cover most or all of the expenses not covered by Medicaid, Medicare, or private healthcare plans.
Benefits are paid monthly, and typically assisted living expenses are covered, but not independent living expenses. If there is a lifetime or annual limit, it will be clearly explained and defined in the policy. Contract exclusions may impact benefits and waiting periods or elimination periods can potentially delay payments.
How Much Will It Pay?
It depends on the type of contract you have. A very basic policy will not cover all of your out-of-pocket costs, but it will place a cap on your obligations. If, for example, your maximum potential out-of-pocket cost (after your healthcare coverage has started to pay 100%) is $10,000, you could reduce the amount to $0-$1,000 with a supplemental policy. You pay a slightly higher premium to cover some of your risk, or most of the risk, if that’s your preference. More than one policy can be utilized to reduce expenses, and several carriers may be utilized.
If you wanted to cover ALL of your out-of-pocket expenses, which would include any copays, coinsurance or deductibles on your medical coverage, there would be no healthcare costs other than the premiums on your primary and secondary plans. Thus, if you were paying $500 per month in premiums, that would represent your entire expenditure, regardless of whether you had a healthy year with few claims or a claim-filled year.
An HSA with 0% coinsurance provides this type of benefit. In-network treatment may also be required. Emergency treatment can utilize out-of-network providers. Other common coinsurance options are 10%, 20%, 30%, 40%, and 50%. Preventative benefits are provided without having to meet the deductible or coinsurance.
A supplementary policy can be offered that will cover 100% of any medical expense you have (other than your health insurance premium and its benefits). However, when you compare the cost of that type of plan to an option that just pays 90% (or 80%), you may be over-spending, especially if you stay relatively healthy. Also, the extra money you spend could be quite substantial. AFLAC plans often act as non-primary coverage, but may only be offered through payroll deduction.
A family of four pays $600 per month in premiums for their healthcare coverage. Generally, the combination of copays, coinsurance, and deductibles on office visits, prescriptions, lab tests and inpatient or outpatient procedures cost an additional $4,000 per year. Thus, the $4,000 is the out-of-pocket cost that a supplementary plan would cover.
Is it best to have 100% of the $4,000 covered by paying about $275 per month, or perhaps only covering 50% of the $4,000 ($2,000) and paying about $100 per month. It certainly makes more economical sense to pay the lower amount. Not only will you put more money in your pocket, but after 5-10 years (or longer), the savings will be likely be in the thousands of dollars. And once you are eligible for Medicare, your needs may change. Since health conditions (and family members) can quickly change, annual reviews of anticipated medical expenses are very important.
When you reach 65, your “secondary” coverage will actually take the form of a Medigap (Medicare Supplement) policy. There are approximately 14 available options that offer different sets of benefits. Typical monthly costs range between $90 and $200, depending on age and perhaps health conditions. Medicare “Advantage” policies are also offered by many carriers at substantially lower premiums. Additional benefits are often provided, including vision, dental, and hearing..
Premiums on many Advantage contracts are $0, and prescription drug benefits are often included. Additional perks, including dental, vision, and hearing benefits (see above), fitness coverage, gym memberships, $0 copay for virtual visits, care management assistance, and concierge services.
Hospital Indemnity Policies
High deductible health plans (HDHPs) are required with an HSA. Since out-of-pocket expenses are often $8,700 ($17,400 per family), a secondary plan is ideal to help reduce the burden of thousands of dollars of medical bills. Common hospital expenses include room charges, anesthesia, surgery, and physician fees. The 10 states with the largest average non-profit hospital adjusted expenses per inpatient day are listed below (current estimates):
$4,464 – California
$4,292 – Oregon
$3,912 – Washington
$3,851 – Massachusetts
$3,808 – Colorado
$3,747 – New York
$3,692 – District Of Columbia
$3,670 – Utah
$3,639 – Wyoming
$3,543 – New Jersey
Coordination Of Benefits (COB)
This provision provides the synchronization of benefits for an individual or family with two separate healthcare plans. A primary and secondary benefit is designated. If the entire bill is not paid by the primary carrier, the secondary insurer will pay the balance of the outstanding bill, subject to policy guidelines.
Often, students will have University benefits along with coverage through a parent’s policy. In this scenario, a local student university medical center can offer quicker basic service with little or no out-of-pocket expenses. Married couples occasionally both have group benefits. If the provider networks are different, additional out-of-area hospitals may be available.
Coordination of Benefits (COB) also refers to Seniors that have Medicare plans that provide medical and prescription drug benefits. The primary payer (can be a private carrier or Medicare) is responsible for initial coverage. Often, an agreement exists between the insurer and the Benefits Coordination and Recovery Center. It’s also important to ensure that no more than 100% of the claim is paid, and no duplicate payments are dispersed.
Medicare-eligibility data and information is often shared with other payers and related entities when a secondary payment is involved. The customer may also be asked to coordinate supplemental and/or secondary payments of claims with other carriers. It is critical that the total sum paid from multiple claims does not exceed the specific amount due to be paid. Part D benefits are also part of the coordination process.
Are Medigap Plans Considered Supplementary Coverage?
“Medigap” policies are indeed designed to supplement the benefits that Medicare provides. By paying most of the potential out of pocket expenses, persons age 65 and over can effectively budget for expected and unexpected hospital, prescription, office visit, and other costs. Policies are issued separately, so two married spouses would have to purchase two plans. Senior plans are very popular since they provide an option to more accurately predict maximum out-of-pocket expenses.
Private companies offer Medicare Supplementary coverage including industry giants Aetna, Humana, UnitedHealthcare, Cigna, Mutual Of Omaha, Medico, and Blue Cross Blue Shield. Many additional carriers also offer plans, including Capitol Life, Central States, First Health And Life, Medico, Omaha Insurance, New Era Life, Manhattan Life, Great Southern Life, United American, Oxford Life, and Accendo. In many states, regional insurers feature very competitive prices.
Some of the most common expenses covered include Part A and B coinsurance, three pints of blood, Part A Hospice care, skilled nursing care, Part A and B deductibles, and foreign travel. NOTE: Many standardized plans are offered (A though N), and benefits and cost of Supplement plans vary. Medicare “Advantage” contracts replace original Medicare benefits, so you generally don’t use a supplement. A high deductible plan (G-HD) is available with a $2,490 deductible. Once the deductible has been met, covered benefits are provided with no out-of-pocket expenses.
NOTE: Persons that qualify for Social Security Disability may be able to utilize a secondary benefit. Although the Social Security Administration covers the majority of expenses, large bills could occur, depending on the type of surgery and/or treatment.
How Do I Purchase A Policy?
An experienced broker that represents several of the insurers that offer secondary coverage is the best option. They can also coordinate your primary and secondary policies so they work together to reduce your out of pocket costs. The quotes you request from our website will give you access to affordable options through these types of brokers. You will be able to apply direct or with the help of an expert.