5 Steps to Understanding Your Health Insurance Before Giving Birth

5 Steps to Understanding Your Health Insurance Before Giving Birth

So you're having a baby? Sounds expensive. Our financial expert is here with 5 simple steps to understanding your health insurance.

Published December 13, 2017

by Meredith Rines

Accountant and Certified Financial Planner

With all the excitement surrounding your changing body, decorating the nursery, making sure everything is in it’s place; it’s easy to feel overwhelmed with the financial side of pregnancy and childbirth. Medical bills can be confusing and insurance coverage differs between policies. With recent changes in health care laws and plan coverage, it’s important to understand your health insurance and what your specific policy will cover and what you will be responsible for.

Prices for doctor appointments, hospital stays and births vary from state to state, even hospital to hospital. A study from 2014 by the University of California, San Francisco found that hospital costs of an uncomplicated vaginal birth ranged from $3,296 to $37,227 in the United States alone.

You can create a plan to ask the right questions to begin understanding your health insurance policy and so you know how much money to have in savings before the baby’s arrival:

The first step is asking for an estimate. You can ask your doctor, your hospital, and your insurance company for an estimate. An estimate can be for prenatal appointments, ultrasounds, tests, labor and birth. However, it’s important to understand an estimate isn’t set in stone and can change depending on any complications, rate increases and so on. But it’s a good starting place.

After receiving your estimates, the second step is to speak with yours and your spouse’s Human Resource manager. If you and your husband have different insurance policies, the costs can vary for coverage for your child. It’s important to get a full picture of what the future health care costs will be. You have time after the child’s birth to enroll them, but having an idea of monthly costs can benefit you.

Also, most insurance policies under the Affordable Care Act have a provision that states the child is automatically enrolled under the older parent’s insurance policy for the first 30 days, even if the parent opts not to use that coverage starting on day 31. This is very important if your child is admitted to the NICU or has any doctor visits in the first 30 days, which they will.

The third step is to make sure your doctor and hospital are in your provider network. Most insurance companies have access on their website that allows you to search your area for providers in your network and what coverage is included in your plan. You could also call your insurance company directly to ask a representative. All you need is your policy number, group ID, and a few questions to ask:

  • Is prenatal appointments and prenatal care covered?
  • What type of prenatal tests are covered? Ask about tests like ultrasounds, genetic testing, etc.
  • Are all types of labor and birth, vaginal or cesarean, covered by my policy?
  • Which hospitals and doctors are in my provider network?
  • How long of a hospital stay is covered after delivery?
  • If you’re interested in a home birth with a midwife or hiring a doula, ask if these are covered as well.

Under the Affordable Care Act, health plans are required to cover maternity care and childbirth; however, some older plans have been grandfathered in. It’s important to ask those questions above to make sure your policy fits your needs and your budget.

Are you under the age of 26 and still enrolled on your parent’s healthcare? Then you may want to check with the insurance provider if delivery and labor are covered. Most insurance companies cover prenatal care and appointments, but may not have labor and birth coverage.

The fourth step is to understand your plan year. Timing is very important when it comes to insurance coverage. Most policies run on a calendar year. If you’re pregnancy and delivery extend to a separate calendar year then you may be responsible for two deductibles, additional copays, and two out-of-pocket maximum amounts. If your plan year is based on a calendar and your pregnancy or delivery will extend into a new plan year then ask your OB-GYN if they plan to use global billing, which is where providers package charges to insurance companies.

For the fifth step, you need to know your out-of-pocket spending maximum for the plan year. This amount is the most you’ll pay for in-network charges in a plan year. You’ll have a separate out-of-pocket maximum for any out-of-network charges, too. It’s important to know both of those numbers; however, if you’ve verified your doctor and hospital are in-network then you should be alright knowing that’s the maximum amount you will pay.

After birth, please be aware the child will be placed under the mother’s name, patient ID, and under her insurance. If for any reason the child is admitted to the NICU or stays longer than the mother, then the child will be readmitted under their own patient ID. Which means another claim will be filed with the insurance company under your child’s name. This could mean a second deductible or copay will be due as well.

Again, if both mother and father have separate insurance policies, you may want to verify if they have automatic coverage for the first 30 days under the older parent. If so, then any additional hospital stays or doctor appointments with the child should be filed under the older parent’s insurance policy.

A great tip to help relieve the financial stress is to plan ahead and put into savings your out-of-pocket maximum. This amount is the most you will be required to pay during your plan year. This maximum amount will include any prenatal visits, hospital stays and childbirth. However, if that amount seems a little daunting and unreachable, then start by saving enough to meet your deductible.

Take your out-of-pocket maximum (or deductible cost) and divide by the number of months you have until your baby’s birth. That’s the amount you need to save each month. Now don’t stress if you don’t reach your goal. Babies are unpredictable and don’t follow a schedule very well. So make sure you start a savings plan, but don’t let it control you. If for some reason you don’t reach your goal then that’s okay! It could take anywhere from 2 weeks to 6 weeks postpartum until your insurance provider processes any bills. Also, majority of hospitals will enter into a payment plan if you need one.

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Meredith Rines, MBA, CFP®
Meredith Rines Accountant and Certified Financial Planner
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Wife, Mom, MBA, Certified Financial Planner, and a budget and financial strategist helping families pay off debt and live the life they've always wanted. Meredith resides in Missouri with her… Read more

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