5 Steps To Understanding Your Health Insurance Before Giving Birth
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5 Steps To Understanding Your Health Insurance Before Giving Birth

Find out how to create a plan to understand your health insurance before giving birth and view advice for saving money during this time.

Updated March 19, 2024

by Meredith Rines

Accountant and Certified Financial Planner

With all the excitement surrounding your changing body, decorating the nursery, and making sure everything is in its 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. 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 (UCSF) found that hospital costs of an uncomplicated vaginal birth ranged from $3,296 to $37,227 in the United States alone.1 With more recent changes in healthcare laws and plan coverage, it’s important to understand your health insurance, what your specific policy will cover, and what you’ll be responsible for.

Understanding Your Health Insurance Before Giving Birth

You can create a plan to ask the right questions to begin understanding your health insurance policy. This way, you know how much money to have in your savings before baby’s arrival. Here are five steps to take:

1. Ask for an Estimate

You can ask your doctor, hospital, and insurance company for an estimate. An estimate can be for prenatal appointments, ultrasounds, tests, labor, and birth. However, an estimate isn’t set in stone. It can change depending on any complications, rate increases, etc. But it’s a good starting place!

2. Talk To Your Human Resource Manager

After receiving your estimates, speak with your and your spouse’s human resource manager. If you and your spouse have different insurance policies, the costs can vary for coverage for your child. It’s important to get a complete picture of your future healthcare costs. After your baby’s birth, you’ll have time to enroll them, but knowing the monthly costs can benefit you.

Also, most insurance policies under the Affordable Care Act have a provision stating that 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.

3. Ensure Your Providers Are In-Network

Make sure your doctor and hospital are in your provider network. On their website, most insurance companies allow you to search your area for providers in your network and see what coverage your plan includes. 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:

  • Are prenatal appointments and prenatal care covered?
  • What types of prenatal tests are covered (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 do you cover after delivery?
  • Do I have coverage for a home birth with a midwife or for hiring a doula?

Under the Affordable Care Act, health plans must cover maternity care and childbirth.2 However, some older plans have been grandfathered in. (This means some health plans won’t have maternity and childbirth care due to an exception.) It’s essential to ask the questions above to ensure your policy fits your needs and budget.

Note: Are you under the age of 26 and still enrolled in your parent’s healthcare? If so, you may want to check if the insurance provider covers delivery and labor. Most insurance companies cover prenatal care and appointments but may not have labor and birth coverage.

4. Determine Your Plan Year

Timing is very important when it comes to insurance coverage. Most policies run on a calendar year. If your pregnancy and delivery extend to a separate calendar year, 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, ask your OB-GYN if they plan to use global billing, where providers package charges (fixed costs) to insurance companies.3

5. Figure Out Your Out-Of-Pocket Spending Maximum

Finally, you need to know your out-of-pocket spending maximum for the plan year. This amount is the most you’ll have to pay for in-network charges in a plan year.4 You’ll also have a separate out-of-pocket maximum for any out-of-network charges. It’s important to know both numbers; however, if you’ve verified that your doctor and hospital are in-network, you should be all right knowing that’s the maximum amount you will pay.

After birth, please be aware that your child will be under the mother’s name, patient ID, and insurance. If a baby is admitted to the NICU or stays longer than the mother, they will be readmitted under their own patient ID. Another claim will be filed with the insurance company under your child’s name, which could mean a second deductible or copay will also be due.

Again, if both parents have separate health insurance policies, you may want to verify if your child has automatic coverage for the first 30 days under the older parent. If so, file any additional hospital stays or doctor appointments with baby under the older parent’s insurance policy.

Tip for Saving Money Before Giving Birth

A great tip to help relieve the financial stress is to plan ahead and put your out-of-pocket maximum into savings. This amount is the most you’ll have to pay during your plan year. It will include any prenatal visits, hospital stays, and childbirth. However, if that amount seems daunting and unreachable, you can 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.

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 you don’t reach your goal, that’s okay! It could take anywhere from two to six weeks postpartum for your insurance provider to process any bills. Also, most hospitals will enter into a payment plan if you need one.

Having a baby is certainly expensive, which can be a source of stress for families welcoming a new child. But by taking the time to understand your health insurance coverage and saving money before you give birth, you can come up with a game plan.

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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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