Secondary health insurance is a type of insurance that overlaps with a primary type of insurance already held by a person. This situation occurs often in family situations. Two parents may both hold work health insurance policies in which they can add spouses and children as dependents so that, together, the policies cover the same people twice. This can have several advantages, depending on the situation of the family and the type of coverage.
The basic benefit for secondary health insurance is greater coverage. However, the two policies don't stack, paying twice for the same medical benefits. Instead, they have redundant clauses that make sure only one of the policies takes effect for most medical procedures. These clauses don't effect every situation, however. For a family that has long-term or serious medical issues that a single policy may not cover or fully cover, secondary health insurance can be ideal and help pay associated costs.
Policy changes occur when companies move to a different type of plan, or when insurance companies change the policy themselves. These changes can leave holes in one of the policies. The secondary policy, if it remains unchanged, can help cover these holes and offer continuing coverage for certain medical treatments or under doctors that may no longer be covered under the primary policy.
Families should also consider economic choices and changes. Secondary health insurance can be important if one spouse decides to switch jobs — in which case health benefits would take time to start again — or loses a job and, therefore, the accompanying insurance policy. If a spouse is considering self-employment, the same situation applies: Secondary insurance can become primary insurance for the family without leaving gaps in coverage.
If companies allow their workers to customize their policies within certain parameters, then spouses can more easily choose plans that cover a broad range of medical issues for the entire family, combining both policies. This can reduce the problem of overlaps and make secondary health insurance more of a benefit than if it was too similar to the primary policy.