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What Do Primary (aka “First Payer”) or Secondary (Excess) Medical Coverage Mean and How Do They Differ?
Primary (aka “First Payer”) Medical Coverage means your medical bills are paid from the first dollar. No “coordination of benefit” claim forms need to be filed. You need to know that many travel insurance plans with primary (aka “First Payer”) medical benefits will still ask on the claim forms if you have other medical insurance. If you answer “yes”, they will likely submit your claim to your other insurance first and process your claim as Secondary coverage.
Primary (aka “First Payer”) Medical Coverage works best if your medical claim is less than the coverage amount. That’s because your travel insurance will pay the claim up to its limit. But, when the Primary travel insurance benefits are exhausted, your other insurance won’t count your deductibles and co-pays as paid.
For example, here’s what happens if you have a $70,000 medical claim with a travel insurance plan that has $50,000 Primary (aka “First Payer”) coverage:
Secondary Medical Coverage means your medical bills are paid after any other coverage you have pays its share. This means that Secondary coverage will pay any deductibles, out-of-pocket expenses or co-pays up to its coverage limit. The only real drawback to a Secondary Medical plan is that it can be a lot of extra time-consuming paperwork, made worse by complicated prescription benefits.
For example, here’s what happens if you have a $6,000 medical claim ($5,500 medical & $500 prescriptions) with a travel insurance plan that has $25,000 Secondary coverage:
Here’s a little detail that’s good to know: You probably will have to pay your medical bills yourself while on your trip. That’s because travel insurance plans are “indemnification” plans (you will be reimbursed – indemnified) after your trip by the insurance company. Travel insurance is not a “pay on behalf of” plan. You don’t just give the medical facility a card. In some cases, a few companies can advance payment to the medical facility, but it’s on a case-by-case basis.
Here’s another little detail that’s good to know: Secondary coverage assumes you have other coverage that’s Primary. If you have no other coverage Secondary, in effect, becomes Primary.
How Much Emergency Medical Coverage is Enough?
There are a few things you need to find out before you settle on an amount of Emergency Medical / Dental and Emergency Medical Transportation coverage.
A common myth is that Primary plans cost more than Secondary plans. The actual cost of Travel Insurance is based on your age, trip cost and trip length. Some Primary plans are less expensive than Secondary plans at certain ages and vice versa for other ages.
One more thing to be aware of is that the emergency medical transportation portion of a policy doesn’t pay for the medical treatment. That’s covered under the emergency medical portion of the travel insurance policy.
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