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Secondary Health Insurance: When & Why You Need It

If you need to find secondary health insurance coverage, you may want to question yourself why. There are some legitimate reasons for carrying a secondary policy, but it isn't always the smartest decision. If your group insurance is free, but has a huge deductible (more than $5,000), you are a candidate for an alternative solution. Perhaps your insurance doesn't cover items you believe important, which is another good reason. You may need secondary coverage as a supplement for Medicare. This is not only common, it's very smart.

Step 1

Consider the wisdom of buying a supplemental policy. If it's a Medicare supplement, those policies are for secondary insurance coverage and good decisions. If the policy is a secondary health policy just as an extra precaution, beware. The premium you pay may not be worth the extra coverage. Every policy has deductibles and reasonable and customary payments. If your primary insurance company pays $200 for a $300 bill, and your secondary coverage would only pay $210, they only pick up $10. If your premiums are several hundred a month, it doesn't make sense.

Step 2

Watch out for fighting about primary coverage. Sometimes the secondary policy actually becomes a nuisance and causes delays in payment. Some insurance companies fight over which company is the primary carrier, with both pointing at the other company. This is normally a mess to correct.

Step 3

Check local agents for coverage. If you think you still need a secondary health insurance policy, most local agents can help you. If you have an auto, life or homeowners insurance agent, ask her if she carries policies. See what she recommends.

Step 4

See about an inexpensive policy that pays you cash if you go to the hospital or have an accident. Many times, you buy the policies through work. Sometimes these are valuable if you truly worry about a catastrophic illness like cancer or heart disease. If that's your reason for a secondary policy, these might be more beneficial since they provide cash.

Step 5

Look into a health savings account and high deductible as your side plan. An HSA is a way to put money aside to cover a high deductible or out-of-pocket expense. You do it on a tax-free basis, and the money grows tax-free. Get a secondary plan with the highest possible deductible, and put the money you would have spent on a higher premium into it. You own the cash in the savings portion.

Step 6

See if your spouse has health insurance available. Most couples use this as a way to get secondary health insurance. This is one way to help guarantee that you'll have insurance if one of you loses your position.