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Article | June 2019

Secondary Health Insurance

Secondary health insurance is coverage you can buy separately from a medical plan. It helps cover you for care and services that your primary medical plan may not. This secondary insurance could be a vision plan, dental plan, or an accidental injury plan, to name a few. These are also called voluntary or supplemental insurance plans.

Some secondary insurance plans may pay you cash. These plans can help pay out-of-pocket health care costs if you get seriously injured or sick.

What are the types of secondary insurance?

Secondary health insurance, or voluntary or supplemental insurance, could refer to many types of coverage, including:

  • Vision: Your medical plan will not cover you for vision care. A vision plan can provide coverage for routine eye exams and prescription glasses or contacts, depending on the plan.
  • Dental: A dental plan can cover you for preventive care such as routine teeth cleanings and some X-rays. It may also help cover you for certain kinds of specialized dental care. Different types of dental plans vary in what they cover and how much you might pay.
  • Disability: Short- and long-term disability plans are a type of secondary insurance coverage. It gives you benefits if you become injured or ill and can't work for any length of time.
  • Life Insurance: A type of secondary insurance that pays out a lump sum to a beneficiary in the event of your death.
  • Accident Insurance: If you have an unexpected accident or injury, costs can add up quickly. These costs often go well beyond what your primary medical plan will cover. An accidental injury plan is a type of secondary insurance that may give you a cash payout, or lump sum. You can use this money to help pay medical bills or household expenses.
  • Hospital Care Insurance: Need to stay in the hospital for an unexpected medical problem? Hospital care insurance can vary in terms, but often covers you for certain serious illnesses or conditions, such as stroke or heart attack. These plans may give you a cash payment to apply to costs.
  • Cancer Insurance: Some secondary insurance plans can help cover treatment costs related to certain types of cancer.
  • Medicare Supplement Insurance: Medicare supplement plans help cover things that Original Medicare does not.

Is secondary insurance the same as gap insurance?

Gap insurance is a type of secondary insurance. It's sometimes called "limited benefits insurance." Gap insurance offers cash benefits. This means it can help pay health care costs related to your deductible, copay, coinsurance, and other out-of-pocket medical expenses.

Where can you buy secondary health insurance?

These plans are sold through private insurance companies. There are many different kinds of plans, coverage, and terms.

  • If you buy a medical plan on your own through the Health Insurance Marketplace, you can purchase supplemental or secondary coverage through a private insurance company.
  • If you get your medical plan through your employer, you may have the option to add one or more secondary or supplemental plans during enrollment. If not, you can still buy one on your own through a private insurance company.

How does secondary insurance work?

Secondary insurance plans work along with your primary medical plan to help cover gaps in cost, services, or both.

  • Supplemental health plans like vision, dental, and cancer insurance can provide coverage for care and services not typically covered under your medical plan. Supplemental plans often have a deductible, copay, and coinsurance. When you meet the deductible then your plan starts sharing part of the costs with you. When you see a provider you may have to pay a small fee, or copay, at the time of the visit.
  • Lump sum insurance plans pay you a cash amount, should you suffer a covered illness or injury. You can typically use the money however you'd like. You can pay off medical bills, pay your deductible, or even use it to cover everyday expenses like childcare, groceries, rent, and utilities.
  • Gap insurance plans help you cover out-of-pocket costs related to your health care. For example, you can use a gap insurance plan to help pay your medical plan deductible or the deductible for a dental or vision plan. It can also help pay copays and any payments you make toward coinsurance.
  • You may be required to pay a monthly premium for some secondary insurance plans. The premium cost depends on the type of plan and the coverage you choose.
  • You may choose to have more than one type of secondary health insurance. These can provide benefits for different types of care and costs, should you need it.

It's important to note that most secondary health insurance does not need to conform to Affordable Care Act (ACA) standards. For example, insurance carriers can ask you about pre-existing conditions and can deny you coverage in certain situations. Make sure you understand the terms, including any exclusions and limitations, of any additional coverage you buy.

Can you get secondary health insurance to cover a high deductible, a copay, or coinsurance?

Yes, you can get secondary medical insurance to help cover out-of-pocket costs. This may include a deductible, your copays, and coinsurance payments. This type of plan is often called a "limited benefits" plan or simply "gap insurance."

Is secondary health insurance worth the cost?

Many secondary insurance plans have affordable monthly premiums. But cost is just one of the factors. Consider the following to find out if this type of coverage is right for you:

  • What does your primary medical plan cover and not cover?
  • What type of medical care do you expect to need?
  • Do you expect to need care that your medical plan doesn't cover? For example, do you need prescription eyewear or have a chronic medical condition?
  • No one expects accidents, but do you participate in risky sports or suffer regular injuries?
  • Do you have a high deductible medical plan? If so, would you have difficulties paying it if you needed to? Remember you must meet your deductible before your health plan kicks in to start helping share costs for coverage.

Answering these questions can help you decide if secondary coverage might be right for you.

What's not covered by secondary health insurance?

It depends on the type of plan you buy. Most plans will not cover services or treatment that are experimental or cosmetic. Read the details of any secondary health insurance plan you are considering. There are usually limits on coverage and services.

This information is for educational purposes only. It is not medical advice. Always consult your doctor for appropriate examinations, treatment, testing, and care recommendations. Any third party content is the responsibility of such third party. Cigna does not endorse or guarantee the accuracy of any third party content and is not responsible for such content. Your access to and use of this content is at your sole risk.

Sources:

What Is Supplemental Health Care and What Does It Mean to Me? The Street, April 18, 2019, https://www.thestreet.com/personal-finance/insurance/health-insurance/supplemental-health-care-14930875

Supplemental Medical Insurance, Bankrate, https://www.bankrate.com/glossary/s/supplemental-medical-insurance/, accessed June 18, 2019