What happens if an insured person files claims under two health plans?

When an insured person files claims under two health plans, coordination of benefits occurs to prevent the situation where the insured profits from their coverage—an arrangement known as overinsurance. This means that when multiple health insurance policies are involved, the plans will collaborate to determine which one is primary and which is secondary. The primary plan pays its benefits first, and then the secondary plan may cover additional costs, up to the total expenses incurred. However, the total amount paid by both plans will not exceed the total allowed charges, preventing the insured from gaining a financial advantage beyond their incurred medical expenses.

This coordinated approach ensures that insurers work together to manage payouts efficiently and reduces the risk of insurance fraud. In contrast, if one plan was to pay in full without coordination, it could lead to scenarios where the insured receives benefits that exceed their actual expenses, which is not permissible under typical insurance policies.