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After many years of school, I recently started work. I learned about the different categories of health insurance: for an HMO I have to contact my PCP, PPO gives more flexibility, and POS is somewhere in between. More flexibility in choosing doctors should cost more. This is my extent of knowledge.

My company gave me the option to sign up for a PPO health plan from "Blue Cross and Blue Shield of Illinois", for which the monthly premium is ~700$. My partner is enrolled in Aetna's plan, which costs 30$/month.

My question is how can plan's costs differ by so much? I'm tempted to opt off of my company's plan and get added to my partner's plan as a dependent, but just wanted to see if I'm missing anything.

Thanks in advance!

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    As a dependent? Probably not eligible. You need to ask Aetna if you can be added to your partner's plan as an unmarried domestic partner, and ask if they require a domestic partnership document to be filed with the state. Coverage rules vary by state.
    – MTA
    Aug 22 at 13:39
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    And as a worst case solution, you could bite the bullet and get married.
    – Barmar
    Aug 22 at 13:55
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    Usually employees have a large company discount. Partners,, spouses, parents, children,..usually don't have any discounts. Depends on company policies. Aug 22 at 19:44
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    $30 a month is $360 a year, times, say, 80 years, is $28.800. Does that sound like it might cover the average lifetime health costs?
    – DonQuiKong
    Aug 22 at 20:08
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    $700 is more than 20x $30.
    – RonJohn
    Aug 23 at 17:58
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Without reading both company's benefit plan materials in detail, it is impossible to know for sure.

My wager, however, is that your partner's company pays a much larger share of the premium amount than your company does. It is highly unlikely that any insurance plan actually costs $30/ month. Your partner's company almost certainly pays the vast majority of the premiums as a benefit to their employees. Your company pays a much smaller fraction of the premiums (my guess is the company pays half and the employee pays half) so you pay $700/ month.

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    This is almost certainly the answer to the question. Some companies subsidize the cost of health insurance plans and others don't. Of those that do, there is a wide variation in the amount they subsidize.
    – jwh20
    Aug 22 at 10:34
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    Having never lived in the USA, what does a $1400/month health insurance typically provide? In my country this would be enough to get very very low co-pay and co-insurance, single rooms in hospitals and free choice of doctors and hospitals.
    – Nobody
    Aug 22 at 17:36
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    @Nobody - $1400/ month would be a very good family plan. There aren't a whole lot of hospitals that have something other than single rooms. Aug 22 at 18:25
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    Definitely this. In a previous job they offered me three tiers of health plan. If I chose the lowest tier and self-only, my premium would have been $0. The other tiers were something like $20 and $50. For self + spouse, though, even the lowest tier was something like $350. A simple conclusion is that the premium for low-tier self-only was actually $350, mid-tier $370, and top-tier $400, each was twice as much with spousal coverage, and that the company simply paid the first $350 of the premium for whichever plan I chose. Aug 23 at 19:28
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    Answer is likely the majority of the difference, but the specific benefits of each plan matter as well. OP doesn't say if the Blue Cross and Aetna coverages are comparable. Deductibles? Out of pocket max? Rx prices for covered meds? All of these things vary between plans, making some more or less expensive than others. But likely, the biggest difference is the amount the employer is covering for the employee.
    – JesseM
    Aug 23 at 20:39
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You'd need to know the actual cost of each plan to properly compare, not just what the employee pays. When you compared actual plan costs you'd likely find that the price does not vary much, and if it does it's likely due to differences in coverage (co-pay, co-insurance, maximum out of pocket, deductible, etc).

You should find out how much it will cost to add you to your partner's plan and compare that coverage to what your company offers. Benefits vary wildly between companies.

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  • That last point is key. The partner may only pay $30/month, but adding a second person to it may be completely unsubsidized and cost several hundred each month. It's unlikely that there's that big a split, but it's certainly possible. The cost to add someone is the number to be comparing, not what the primary pays or what the notational full cost is.
    – Bobson
    Aug 24 at 16:38
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Other answer have addressed the price difference. I have know companies that paid only a small percentage of the monthly premium. I have also found some that have paid 100% of the premium.

My question is how can plan's costs differ by so much? I'm tempted to opt off of my company's plan and get added to my partner's plan as a dependent, but just wanted to see if I'm missing anything.

So how hoes one make this switch.

You can't just decide tomorrow to be added to their insurance plan. You need to either wait until your partners company has their benefits open season to be added. The only other way your partner can make changes to their policy choice is to have had a [Qualifying Life Event (QLE)][qle].

There are 4 basic types of qualifying life events. (The following are examples, not a full list.)

Loss of health coverage

  • Losing existing health coverage, including job-based, individual, and student plans
  • Losing eligibility for Medicare, Medicaid, or CHIP
  • Turning 26 and losing coverage through a parent’s plan

Changes in household

  • Getting married or divorced
  • Having a baby or adopting a child
  • Death in the family

Changes in residence

  • Moving to a different ZIP code or county
  • A student moving to or from the place they attend school
  • A seasonal worker moving to or from the place they both live and work
  • Moving to or from a shelter or other transitional housing

Other qualifying events

  • Changes in your income that affect the coverage you qualify for
  • Gaining membership in a federally recognized tribe or status as an Alaska Native Claims Settlement Act (ANCSA) Corporation shareholder
  • Becoming a U.S. citizen
  • Leaving incarceration (jail or prison)
  • AmeriCorps members starting or ending their service

Once open season arrives, or you have determined that a QLE applies to your situation, you then need to get the current documents that describe the coverage options and the costs.

Pay very close attention to the costs of adding a non-employee to the policy. Some companies that cover most of the coverage options for the employee cover a smaller percentage of the non-employees. That could mean that they pay 90% of the premium of the employee but only 25% of the premium of the spouse and children.

The word spouse brings up another issue. The portion that the company pays for a spouse and children being added to the policy is not taxable. The portion of the premium for people being added to the policy who are not tax dependents is considered taxable income. You might not save as much money as you first think. The company might want proof of marriage or proof of a domestic partnership.

I know that with some companies they expect that if the spouse works for a company that also has company sponsored health insurance, they require the spouse to get coverage from their company. I don't know if a company that has that type of rule also has a similar rule for domestic partners.

There can be one benefit of getting added to your partners policy. Some companies will give additional money or benefits to an employee that doesn't need health insurance through them. I have known companies that gave the portion of the premium they would have paid if you don't elect to get coverage. I have known companies that gave extra vacation days. Check with your employer.

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A couple excellent answer already, and I agree with the gist that without knowing the details of the plans involved, it is impossible to tell.

That said, one thing that caught my eye is that your plan is a PPO while your partner's is unspecified (and, I'm assuming, an HMO).

PPOs tend to be dramatically more expensive, because they cover far more doctors, as well as far more procedures. I frequently hear radio commercials for elective medical procedures (such as weight loss surgery, lasik, cosmetic surgery) that advertises something like "will usually be paid by your PPO health insurance".

Whether an HMO or a PPO is a better deal in a specific situation is not something that could easily be answered.

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    There's also the high deductible vs higher premium distinction now, too. Pay less monthly, but more out of pocket, or vice versa.
    – Bobson
    Aug 24 at 16:41
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    +1 My wife elected for her PPO after checking what was included for IVF treatments. It wasn't free to us, but for sure better out of pocket. The PPO prescription formulary is wider too.
    – user662852
    Aug 24 at 19:50
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I am pretty sure that such cheap insurance doesn't exist. I am quite sure that your company pays for most of the cost and you hardly even get a part of it as it's only $30. The only reason I can even think of them not paying for everything is probably that they bought a package. As for your question on what to choose... Read the documentation, check your environment, see the probabilities, solve the maths and see which fits you the best. I would still say to go with the classic as I am a cheapskate but that's up to you and it can change according to your enviroment.

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    "The only reason I can even think of them not paying for everything is probably that they bought a package." Or they pay 100% of the least expensive plan on offer, and the OP's partner has chosen a plan which is $30/month more than the most basic plan available. Aug 22 at 10:31
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I used to work in the insurance industry.

You aren't allowed to decline insurance these days, you're bound to be discriminating someone, somewhere.

So, take car insurance as an example; instead of refusing you for cover on a ten year old car worth $1000, they'll quote you $9000.

That way they don't fall foul of any discriminatory laws but they know for a fact you won't take up their premium.

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    Surely charging a protected group a much higher price than anyone else is the epitome of unlawful discrimination? Your example is not a good analogy because the age of your car is not a protected characteristic and it is lawful for insurance companies to base their pricing on risk factors where doing so doesn't amount to unlawful discirmination.
    – JBentley
    Aug 24 at 9:59
  • Yes but they just refuse to reveal their pricing structure when asked so you never find out if they are discriminating or not! Aug 24 at 14:35
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    Is this scenario applicable in the context of comparing two different employers' provided insurance benefits cost to employees?
    – user662852
    Aug 24 at 19:53
  • @JBentley - The key is to identify factors that are non-discriminatory but also discriminate (e.g. Old people often have bad eyesight. Make bad eyesight a premium item)
    – Valorum
    Aug 24 at 20:10
  • @Valorum I'm not familiar with the US jurisdiction, but in E&W that would be considered indirect discrimination (see section 19 of the Equality Act 2010), but indirect discrimination is actually lawful if it is a "proportionate means of achieving a legitimate aim", which is probably applicable in the case of an insurance company assessing risk.
    – JBentley
    Aug 24 at 21:17

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