iPhone is linked to another phone

Yes, as long as you use the same AppleID, that is exactly how things should work. AppleIDs are not, and never were, intended to be shared between people. Apple considers them individual unique personal login IDs. As long as you both use the same AppleID you share the exact same accounts for all Apple online services - icloud, FaceTime, iMessage, etc.

You both need your own AppleIDs for use with Apple online service accounts.

There may be some data loss, but you can minimize it. If syncing photos with iCloud, ensure Optimization is turned off in Settings/Your Name/iCloud/Photos and/or in Photos/Preferences/iCloud. Then make sure full resolution photos are on the device/computer. When signing out of iCloud, if asked whether you want to retain data, choose yes. Messages conversations will be lost if they are addressed to the ID. See the article below for other places that the old ID should be removed. See Winston Churchill's response in the below discussion. Also set up Family Sharing to keep access to your apps/purchases. 

Apple ID – Create

How to transfer all files from one iCloud account to another

 Apple ID email address or password - What to do after you change

Family Sharing

Family Sharing - Set up

MONSEPINON wrote:

Thank you. Yes, but we’ve always shared an Apple ID and it’s never been an issue. She upgraded phones and all of a sudden our phones merged. I don’t mind if she get her own ID but she is concerned that she might lose existing data.

Exactly why you shouldn’t share an Appleid. Apple makes changes to the services they offer and how those services interact with iOS and MacOS devices all the time. There have been substantial changes particularly in the services offered through iCloud in iOS 10, 11 and 12. iCloud is intended to link people’s devices, by AppleID, to synchronize and share all their data across all their devices. Apple has made great changes to how iOS data is sync’d across devices (e.g. messages in iCloud, introduced with iOS 11.4).

So yes, things have changed and will change, and issues with sharing an AppleID, and thus also sharing equal access to everything tied to that AppleID will just get worse, not better.