What is Secondary Insurance?
- The scenario of secondary insurance comes about as a result of a person being covered by two different health insurance policies. This usually happens when an individual is part of a policy provided by his employer but also covered under a spouse's family policy from her employment. The insurance industry quickly realized the the potential for overpayment existed and the resulting system of primary and secondary insurance seeks to mitigate that.
- The process of deciding which insurance carrier is the primary payer and which is secondary is not always crystal clear. Since the primary insurance provider gets stuck with the larger share of the bill, obviously, a company would prefer to be the secondary carrier. In some instances, the plan which the member has been with the least amount of time automatically becomes the secondary insurance. Additionally, law and the terms of the insuring contract will dictate which policy is secondary.
- Most hospitals and doctors offices have a staff member who is familiar with the way insurance companies work and knows how to handle the process of submitting claims for payment. The entire bill will first be submitted to the primary insurance policy, which pays the amount dictated by the terms of the policy. Sometimes this covers the entire bill, but sometimes part is left over. The medical office will then submit the balance of the bill to the other insurance company. Payment on this remainder is also dictated by the terms of the contract. Often the entire bill will be accounted for at this point, though there might be a small amount left for the patient to cover out of his own pocket.
Coordination of Benefits
- As the price of services continues to rise, most medical facilities have hired a person, or sometimes an entire department, to serve as Coordinator of Benefits. This person is a point of contact between both insurance companies, the patient, and the hospital or doctor's office to make sure that proper payment is made. Dealing with one insurance company can be difficult. Two can be nightmarish. The benefits coordinator is a voice of experience who will help determine which company should be primary, which should be secondary, and proceed accordingly.