Coordination of Benefits With Multiple Health Insurance

Question

I would like to understand how two health insurance companies will co-ordinate their payment. Let's take the following example a person with the following coverage:

Primary health insurance:

(student - United Health Care)
copay: N/A
deductible: $450
coinsurance: 90%
Max out of pocket: $10K

Secondary health insurance:

(Cigna)
copay: $30/$50 (PCP/Specialist)
deductible: $4K
coinsurance: 30%
Max out of pocket: $6K

The primary insurance is provided for free, and cannot waive as the person is an an international student.

The person recently got a bill for $1500 for a simple lab work that estimated by UHC and Cigna as just a few dozen dollars. Later the bill was consolidated to $500 by the secondary insurance.

I got an advice from a benefits consultant that UHC might not be the standard insurance with different pricing for services. However I am still having trouble understanding how that works as I have just the Cigna insurance and I had never paid more than $50 even if the visit included lab work.

My concern is that the primary health insurance sets the price, while the secondary insurance could have had a better price. For instance, imagine a person needs to visit a specialist that is fully covered by the secondary insurance with a copay of $50. If the person have not meet the deductible the might end up paying towards the $450 deductible.

Another concern that the secondary insurance deductible becomes unclear as it's up to the insurance provides to figure out how they split my money and what deductible I pay towards.

What would be your advice/insight on the situation.

Answer 1

It's hard to address your specific example claim because it doesn't sound like we're getting all the details. It sounds like you're trying to compare someone else's claim to the results of a claim you've had yourself, which is trickier than it sounds, because the two claims may have been billed very differently or may be considered different by the provider or the plan(s) for reasons you're not aware of. If you want to determine why a particular claim paid the way it did, your best bet is to call customer service for the plan(s) involved.

However, we can answer your broader question, about how COB works.

The moral of the story, when it comes to coordination of benefits, is that you will never be worse off for having two plans.

Essentially, in a COB situation, the primary adjudicates the claim and pays as appropriate. Then, any patient responsibility (money the provider thinks you owe them) - regardless of if the amount is copay, coinsurance, a procedure that's not covered, or whatever - is sent to the secondary insurance, who adjudicates and pays against that remaining amount.

So, when it comes to contracts (agreements between the provider and the plan(s) about how much a service is worth), it shouldn't matter if the primary has a "worse" contract, since the secondary will apply their contract when they adjudicate the claim.