No. Health insurance is not always cheaper for a couple compared to being single. The cost of health insurance for couples vs. singles depends on several factors.
Cost Comparison for Health Insurance as a Couple or Single
Employer-Sponsored Health Insurance
For employer-sponsored health insurance, adding a spouse can increase premiums significantly. Employers cover a portion of employee premiums but generally require the full additional premium for spousal or family coverage. Overall, employer-sponsored family plans are usually more expensive than individual or employee-plus-one coverage.
However, some employers do subsidize spousal coverage. If one partner’s employer offers affordable insurance with spousal subsidies, it may be cheaper than separate individual plans.
Individual Health Insurance
For individual health insurance purchased directly from an insurer, costs for couples vary greatly by state. Some states allow family policies to be priced similarly to individual policies. Other states allow higher premiums for family tiers.
On average, adding a spouse increases annual individual plan premiums by 28%, while adding a child increases premiums by just 8%. Overall, individual coverage for two partners is often, but not always, more expensive than two separate single plans.
Government-Sponsored Health Insurance
Government-sponsored plans like Medicare and Medicaid have fixed premiums regardless of marital status. Premium subsidies for Affordable Care Act marketplace plans are also based on income, not family size. As a result, government-sponsored coverage generally costs the same for singles and couples.
Factors to Consider When Choosing Health Insurance as a Couple or Single
Out-of-Pocket Exposure
The maximum out-of-pocket limit is higher for family plans than for individual plans. Even if premiums are cheaper on a family plan, couples should weigh their expected healthcare expenses and risk tolerance. High healthcare needs may warrant separate single plans to minimize cost exposure.
Healthcare Needs
Couples with divergent healthcare needs may benefit from separate plans tailored to each person. For example, low vs. high prescription drug use or predictable vs. unpredictable expenses. Separate single plans allow customization of coverage levels and deductibles.
Implications for Health Savings Accounts
Only people covered by qualified High Deductible Health Plans can contribute to Health Savings Accounts (HSAs). Contribution limits are higher for family HDHPs than for single HDHPs. Couples wanting to maximize tax-advantaged HSA contributions may benefit from a joint family HDHP.
Pros and Cons of Combining Health Insurance Policies as a Couple
Potential Benefits
- Lower premiums, depending on insurer and plan details
- Reaching family out-of-pocket limit more quickly
- HSA contributions based on higher family contribution limits
- Coordination of benefits from a single insurer
Potential Drawbacks
- Higher combined deductibles and out-of-pocket exposure
- Higher premiums with certain state regulations or employer plans
- Limited plan customization for each partner’s healthcare needs
- HSA contribution eligibility restrictions requiring a family HDHP
In summary, whether health insurance is cheaper for couples vs. singles depends on the insurance source and specific coverage details. There are trade-offs to consider regarding costs, benefits coverage, and out-of-pocket limits. Overall costs may be lower in some scenarios but not universally across all health plans. Careful comparison of plan specifics is needed to determine the most affordable options.
