You have just gotten a job offer that includes health insurance.  You’re lucky enough that your spouse has great family insurance already, but hey that health insurance is going to cover the cracks in the deductible and co-insurance, so you feel great about that double coverage as you sign your contract.

Well, you just got scammed.  That is, double coverage is a scam, and you would have been far better off negotiating a higher salary in return for not getting insurance.

Here’s why:

Let’s say policy A has a deductible of $1,000 and 75% coinsurance up to an out of pocket max of $3,000.

Policy B is identical, with a deductible of $1,000 and 75% coinsurance up to an out of pocket max of $3,000.

So you get $500 in health care.   It costs you $500 because neither policy pays up to the first $500 (for simplicity let’s ignore the no-deductible services some policies offer)

Then you have a surgery that costs $5,000.    The first policy pays $4,000 on this ($5,000 minus the $500 deductible that was left, and then 75% of the remaining $2,000 on your out of pocket max, plus everything over that).   So that leave’s you with a $1,000 bill.  That bill gets submitted to your second policy, which also has a $1,000 deductible.   So you still have $500 to satisfy there, and so the second policy pays you $500, or if you’re unlucky in how they interpret the secondary coverage, $375.  So policy A pays $4,000, and policy B pays $375 to $500.

This has always seemed wrong to me.  If you have two life insurance and you die, your family gets paid twice.  But if you have two health insurance policies and you get sick, you only get paid once, or maybe once and a little more.

So if one policy is at more risk than the other, the employer that buys the second policy must pay less for the double coverage policy, right?    No, they don’t.  They have to pay full freight for both policies.  That’s where the scam is.

Double coverage is way less coverage than the single coverage policy, but both policies are priced the same.  This is a product of the fact that large employers are forced to make insurance offerings for their entire population even though that offering may be of substantially less value to some employers than others.

But there is a way to solve this.   Just turn down insurance if you are offered double coverage.  Then tell your prospective employer that by turning down insurance, you are saving them $8 grand a year and ask for $8,000 more in salary, or more vacation, or whatever other concession you want.  For them it costs the same, but for you it’s of dramatically greater value.   When you get that value, squirrel a bit of it away for unpaid health care costs.  If you’re lucky and don’t need it, you just have more money.  If you do need the health care, you can get the value that would have been paid by the double coverage with a fraction of the money.

Nicholas Fogelson is an obstetrician-gynecologist who blogs at Academic OB/GYN.

Image credit: Shutterstock.com