To take an example, many (it seems most) jobs that offer health insurance in the US also provide coverage to the worker’s spouse either at no extra cost, or for a token or minor amount more.
It stands to reason that there are some couples where both partners have jobs that offer coverage to both. Why do I always hear about people making a decision about which coverage to go with, rather than simply covering both parties with both plans? When an illness occurs, they could file claims against both insurance policies and eliminate the need to pay a deductible (since the deductible for one policy could be paid out of the proceeds of the other policy claim), and they could possibly end up ahead if the treatment cost, say, $500 and one policy paid out $400 ($100 deductible) and the other paid out $350 ($150 deductible).
Can you simply not do this with standard policies? If so, why?
Most jobs in the US do not provide coverage for spouses or kids at no extra cost. In fact it’s often expensive to bring in your wife and kids. I’ve never seen it where both spouses work and it’s not cheaper to get health insurance for each spouse from his/her employer
Also you can’t double dip, so you’d be paying for coverage you can’t use. If you have two health plans, let’s say Acme and Apex. If Acme pays out the claim, then Apex will not do so. They don’t pay it out as well.
You can do that if one is a supplemental plan, but if they’re both primary plans, only one is going to pay. And your employer won’t give you free supplemental insurance on your wife’s plan for free just because you opted out of their health plan.
Of course with two plans, you can pick which one is best for each incident. But if the deductible is the only thing you’re worrying about, by using both plans you actually have to cover $250 in the long run instead of just $100 or $150. It might still be worth it if there are other factors (what’s covered, co-pays, or just hassle) that sometimes makes one better and sometimes the other, but I doubt that it would be anywhere near enough to make up for the extra cost except in very special cases.
As for the “why” question, that’s simple: Because the insurance companies can get away with doing it that way, so they do.
There is a cost for a spouse and it’s not trivial. Trying this would most likely cost more than what you’d get back (assuming you could – see #2).
You can’t get insurance from two insurance companies. You are required to sign a statement to this effect and if you take the money from more than one, you’re committing fraud. And the insurance companies will prosecute you for it.
You have to choose one plan or another OR have one plan for the wife at her employment and the other for the husband at his. Some people take that option to avoid paying anything at all.
Most health insurance policies (I’d say all, but I haven’t seen every single one) have something called “coordination of benefits.” It basically says that you have a primary insurer, and that insurer will pay.
There may be some policy, somewhere, that will pay for a course of treatment if your primary insurer doesn’t cover it, but that still doesn’t cover the OP’s hypothetical.
My wife has her own plan and is on my plan because the only way to cover our daughter was to have “and family” on one plan or the other (no child only option for either one). Both companies are well aware of the other and usually when my wife seeks care we pay little to nothing. Her insurance pays the bulk of it minus the co-pay or coinsurance. My insurance gets the bill next, sees what her insurance paid, and pays part or all of the rest but we certainly don’t get any money back. The additional benefit isn’t very much though, so it wouldn’t be worth it if it wasn’t “included” with my daughter’s coverage. We have never run into a medical provider that was confused by the concept of primary and secondary insurance, so I don’t think it is all that rare.
How come ? As long as you’re paying your premiums for both, how is it fraud to “double your bet”, so to speak ? I mean, I get that it’s fraud to sign a paper saying you won’t then do it anyway, but what made insurance companies decide to require such statements in the first place ? What does double dipping change, from each insurance company’s point of view ?
I guess some people could try and run scams involving subscribing to 20 different insurances covering the same catastrophe, then provoking it - but that’s no different from scamming just the one insurance company, which they already have ways to investigate and prosecute.
For reasons which are blindingly obvious, insurers don’t like you to be entitled to recover an amount on an insured event which exceeds the amount of your loss attributable to that event. So regardless of how much premium you pay, in general an insurance contract will not entitle you to collect more than the cost or loss attributable to the insured event. If you are over-insured you might be given a refund of your excess premiums.
You are describing fraud as noted. That is all it is plain and simple if the plans aren’t designed to be primary and secondary coverage and you can go to jail for it. It isn’t that uncommon to be covered for the same thing under two primary plans and that is still a bad idea too however. I used to work in the industry and that isn’t illegal but it is frowned upon and not wise. The doctors and hospital hold the patient ultimately responsible for payment even if they are insured and having two insurance companies providing coverage for the same thing can lead to them fighting over who is going to pay for that cancer treatment and neither of them doing it. That leaves the patient in the middle with a bunch of unpaid bills.
I do not pay for my health insurance my employeer does. My Kiaser plan through the union does have copayments for meds ($10.00 I think) and Dr. visits.
I also have a dental plan that pays normally about 80% of fees after the deductables.
My wife has Kaiser insurance throught her work paid by the employeer. There are deductable and co payments. Her dental plan has deductables and co pays.
On the medical because of the double coverage there is no deductables or copayments. In fact I got a Rx for a med that was not susposto be covered for no cost. And while I was taking Niacin an over the counted drug no payment be cause I had an Rx for it.
It has been over 15 year since the last time I had to pay for any medical expences.
On the dental. If I see the dentist my insurance pays its share then sends it to my wife’s insurance and her insurance will pay up to their limit. Most of the time leaving no cost to me. If her insurance’s share is more than what is left they will bank the difference and it can be used for uncovered work of if there is any shortage.
If my sees a sentist same thing except my insurance will not bank the difference.
In my case having my wife on my insurance does not cost me anything or my employeer any more. And having me on my wife’s insurance **does not cost her **any more.
And you can get coverage from more than one insurance. but you will not get more that what the services cost.
It would be fraud to double dip because insurance is there to pay the bills.
If you owe $1,000 and you pay 10% out of your pocket, that leaves $990.00.
If Acme Insurance pays the $990.00 then nothing is owed.
If submit another claim to Apex Insurance, then you are getting money for services not owed for. Why aren’t they owed for? 'Cause Acme already paid for it.
I recall my employer had a fit, because they didn’t offer dental. So I was keeping my COBRA from my last job to have dental. The dental and medical were together and I couldn’t just have one.
Then my employer found out his company was paying for my insurance, when I was already covered by COBRA (Which I paid for myself, with the amount of dental work I was having done I was coming out ahead).
Regarding point 2: You can’t have two insurance companies both as “primary”. But you can have one as primary and another as secondary, as long as they both know about each other. That’s what “coordination of benefits” is all about.
If Acme is primary and Apex is secondary, and they know about each other, then Acme should pay the main amount, then send it to Apex, which should pay whatever they owe, and only THEN should you get a bill for the remainder, which there may not be any by that point.
And some companies are now refusing to cover spouses if they can get coverage from the company THEY work for. One of my coworkers was incensed by this change…the coverage her husband’s company offers is vastly inferior (she says) to our coverage, so she has always done the family thing and included her child and her husband on her company policy. But last year, they changed it…they will cover her child, but not her husband if he is eligible for insurance through his employer. So according to her, she has great coverage for herself and their daughter, but her husband has crappy coverage, and he can’t opt out of it. Another coworker was able to add her husband to her policy when he lost his job, but oh, the paperwork…
I had a mystery illness, and kept getting worse. After a couple of weeks in hospital, my wife brought our young kids in so I could see them “just in case it’s the last time”. So things were pretty grim.
Well, short version: [peasant] I got better… [/peasant]
But my wife found out later that, since we’d changed life insurance companies just before this, their coverages had overlapped. I’d been Double-Covered for a month. The month that I had The Mystery Plague.
So if I’d shuffled off this mortal coil, she’d have made out like a bandi… hey, wait a minute! That was ten years ago, and I’ve never been suspicious until I started typing this… Hmmm…
The real issue was if you made multiple claims and made a profit. For instance, the bill was $100. You send it to insurance A and get $100. You send the same bill to insurance B and get an additional $100.
This drives up rates for everyone and it is in the insurance company’s (and its clients’) interest to keep rates low.
It’s worse than that, if Acme catches wind that your spouse is also covered by Apex, Acme may drop her. Apex may also drop her for double coverage, too.
Veering into IMHO territory here: In my experience, if you and your spouse work but have no children, it is often cheaper for each of you to have your own coverage. Once children enter into the picture, it becomes cheaper for everyone to be on one insurance.
Up until this year, my wife and I both had family plan insurance from both of our employers, and it worked out well, because generally whenever we had medical expenses the amount not covered by the primary insurance would be picked up by the secondary insurance.
This year, when my company’s insurance came up for renewal they switched to a different carrier. When we crunched the numbers, we discovered that the annual premium to add her on my plan was actually greater than the maximum “out-of-pocket” amount on her company’s insurance, so it didn’t make sense to add her on my plan.
You can be covered under two policies. As previously described, the “coordination of benefits” clause kicks in to determine which policy pays first. The secondary policy then calculates their share of the remainder.
The reason a lot of people don’t do this is usually because they calculate that it’s more expensive to pay the premium on the second policy than to take the risk and just insure under one.
Also, the paperwork can become a bit much when there are two policies.
Another reason is that if one policy is an HMO, then the uninsured portion is usually low. And if the secondary insurance is an HMO I am not sure how you would process the paperwork.
For a while there, Typo Knig’s job did cover him + the whole family for no extra cost, so we opted to go that route. For a while, it worked OK. If my coverage (which was primary for me and the kids) paid 80%, his coverage would say “You’re covered for 80%. Wait, this other company paid 80% - so we’re going to pay just 20%”. Net result, we paid nothing.
Then the policy changed so the second company said “we’ll pay 80%. Wait - they already paid 80% so we’re off the hook. Woohoo. Thanks for the premium money, sucka!”.
Even when they did pay something it was usually a huge hassle and rarely worth it.