What is dual medical coverage?
“To sum it up…”
- When someone is said to have dual medical coverage, the reality is that they have two different health insurance policies
- If an employee has health insurance through his or her employer, that policy will typically be referred to as the primary
- If you do not have an employee-sponsored health insurance, choosing the primary policy would be up to the discretion of the insurance companies
- When a person has dual medical coverage, the primary policy will always be used first
With all of the questions surrounding the individual mandate provision of the Affordable Care Act, it is striking to consider that some individuals actually have two health insurance policies at the same time.
As you compare health insurance policies and consider having dual coverage yourself, there are some more details that would be helpful to know.
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The Rationale Behind Having Dual Medical Coverage
Many people wonder if there are any advantages to have dual medical coverage. If there is not, why do people end up owning to separate health insurance policies in the first place?
The reality is that there are certain situations where dual medical coverage makes perfect sense. In most cases, one health insurance policy will provide all of the major benefits that an individual needs in safeguarding their health and well-being.
There are occasions, however, where a person might want to have more protection against possible illness or disease. There is a perception that having dual medical coverage provides that desired hedge of protection, but that is not always the case.
There are also situations where life circumstances end up providing a person with dual medical coverage. An example would be a young adult who is not yet 26 years old. Under the Affordable Care Act, parents are permitted to keep their children on their existing health insurance policy until their 26th birthday, regardless of whether or not they have their own insurance.
If a child was to become employed, and he or she was provided health insurance by the employer, dual medical coverage would result.
When comparing health insurance policies, and taking into your account your own personal situation, you may discover that you have a very good reason to maintain dual medical coverage.
While it is true that more than 15 percent of all Americans still lack adequate medical insurance, a growing number of people are choosing to have dual coverage in order to feel better protected against the high cost of medical treatment today.
There are currently three main categories of people who may decide to maintain dual medical coverage for one reason or another.
- Working age adults under 26 years of age may be covered under their parent’s health insurance policy. Even if they have insurance through their own employer, they may hang onto the other policy as a form of secondary insurance.
- There are many people that become covered under an employer-sponsored health insurance policy, yet who also elect to retain the coverage provided to them by a spouse’s employer-sponsored plan as well.
- Some people have long had a private insurance plan that they feel good about. If they later go to work for an employer that offers a good health insurance benefit, they may elect to hold onto both just to make sure everything works out as planned.
It is important to remember that having dual medical coverage does not mean that you get twice the benefits. In fact, there are many cases where the second policy can never even be used because the primary policy must be utilized first. Deductibles must still be met before a secondary health insurance policy can even come into effect.
The Downside to Having Dual Medical Coverage
As you compare policies and consider purchasing both primary and secondary health insurance coverage, you will want to know some of the downsides to doing so. They include:
- Keeping dual medical coverage can become expensive. Somebody has to pay the premium associated with two policies, even though they share roughly the same benefits.
- Any medical benefit claims must be sent to the primary health insurance first. You would have to exhaust all such benefits before a secondary health insurance policy would be activated. In all but rare circumstances, this is quite difficult to do.
- Secondary plans may provide benefits for expenses not covered under the primary policy, but deductibles are not included in this.
- If you were to maintain dual medical coverage for any length of time, both plans will have deductibles that must be paid before any benefits are paid out to you.
- It is not up to you to choose the primary policy, so even if one plan has better benefits for what ails you, the choice would be left up to the insurance providers as to which plan is utilized.
As you can see, dual medical coverage does not provide you with more flexibility in terms of the benefits that you receive. Your primary plan dictates that and only under special circumstances will a second policy begin to come into effect.
If you are currently comparing health insurance policies, and you are thinking about retaining dual medical coverage, you will want to weigh the pros and cons of doing so.
There are certain situations where doing so might be advantageous, such as being covered under a parent’s policy and not being entirely sure that you will keep your new job for a full year.
In most other situations, however, paying two premiums just does not make financial sense; you’ll most likely be better off taking your time to select one good policy that provides you with the benefits you really need.
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