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What Are the Differences between Primary and Secondary Insurance?

By M. Walker
Updated May 16, 2024
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Individuals can be covered by both primary and secondary insurance. Primary insurance refers to the main insurance plan, which is usually either the longest held plan or the plan supplied by an employer or government. Secondary insurance is a supplemental plan, which might be a plan offered through a spouse's employer or paid for by the individual.

Many individuals are only covered by one plan, but some have the option of purchasing or applying for secondary coverage. For example, if a person gets married and his or her spouse’s plan offers health insurance, or if a person gets a new job, then additional insurance options become available. Government sponsored healthcare plans, such as Medicare or Medicaid in the US, are often used as secondary coverage plans.

Designating the primary and secondary insurance plans is often the choice of the individual rather than the employer or insurance company, but this will vary according to the situation. For many people, this means examining the coverage options, looking at co-pay costs and deductibles, and considering the monthly cost when determining the best choice for insurance. Some individuals might be covered by an employer, but their spouses’ plans might offer better or more affordable coverage. In this case, the spousal plan could work best as the primary insurance plan.

Primary and secondary insurance plans will generally cover medical costs differently. The primary plan will kick in first, paying the standard rate for a medical expense, such as a doctor’s visit or prescription. Next, the secondary coverage plan will be billed, and the insurance company will decide how much to contribute to the unpaid costs.

This usually involves calculating the difference between what the primary company paid and what the secondary company would have paid. For example, if a doctor’s visit cost $50 US Dollars (USD), then the primary insurance rate could have been $30 USD, while the secondary insurance rate could have been $40 USD. In this case, the secondary insurance company would pay $10 USD, the difference between the two rates. If, on the other hand, the secondary company’s rate was only $20, then that company would not pay any extra.

With respect to car insurance, primary and secondary coverage generally refers to the costs of covering the primary and secondary drivers of each vehicle. The primary driver will be the main user of the car, while the secondary driver will be an additional car user. Home insurance also sometimes requires primary and secondary insurance, which will refer to coverage plans for primary and secondary homes.

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Discussion Comments
By Animandel — On Oct 31, 2014

Medicare secondary insurance plans are a lifesaver for many older adults who would otherwise be unable to avoid their medical prescriptions.

By Drentel — On Oct 31, 2014

Unless you have a great medical health insurance there are some areas where the coverage is not everything you need it to be. I try to provide good health insurance for all of the employees who work for me, but to be honest I cannot avoid to pay for the top notch plans. I couldn't stay in business if I did.

Some of my employees are always telling me that I need to provide dental coverage. There is no way I can afford a comprehensive dental insurance package for them, but I am looking into finding some type of dental insurance that they could use as secondary dental insurance. Some of these plans will at least save them a few bucks, and for many of them this will be the only dental insurance they have.

By Sporkasia — On Oct 30, 2014

At one of the first companies I worked for there was no health insurance offered by the company. The company was a small business and the owners simply could not afford to offer health and medical insurance for all of the employees. At the time, this was not a big concern for me because I had a decent health care plan already in place.

Even though there was no health coverage at the job, the owners did eventually work out a deal with a local insurance company, so that we could buy certain types of smaller policies at reduced prices. For example, I was able to buy a policy that would pay me if I got sick and couldn't work. Basically the policy would pay me the same as if I were still working.

This was great because my health insurance would only pay my medical expenses. Not having to worry about income if I got really sick was a big relief.

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