Understanding Maternity Health Insurance

Maternity Insurance

With the cost of having a baby, including prenatal care, childbirth, and purchasing all the must-haves necessary to care of a newborn often equating to the price of buying a new car, maternity insurance benefits are important. Not having sufficient coverage can mean paying hospital bills when you should be saving money for your child's college education instead.

The Costs of Childbirth

Americans pay more for maternity healthcare than any other country in the world, and these prices have tripled in the past 20 years. Costs vary significantly from one parent to the next, depending on the exact care you obtain. Prenatal testing, epidurals anesthesia, water birthing, having a midwife and other such options can all add to your bill.

Costs will also vary between states. In general, the total costs for a delivery are in the ballpark of the following:

  • Birth center/home birth - $3,000
  • Hospital vaginal delivery - $10,000
  • Caesarean deliver - $20,000

If your baby is born premature or requires time spent in the Neonatal Intensive Care Unit (NICU), you can expect to pay around $3,000 per day for that care in addition to the birthing cost. For most women, the majority of these costs are absorbed by insurance or Medicaid, but even then the out-of-pocket costs can be quite high if the policy does not offer thorough coverage.

Maternity Insurance Coverage

The best time to get insurance to cover the cost of your pregnancy is before you get pregnant. Many policies include a waiting period for preexisting conditions, and pregnancy most definitely qualifies as a preexisting condition. This means if you are pregnant when you purchase insurance, you may have to pay insurance premiums while covering the cost of prenatal visits out of your pocket. Depending on the length of the waiting period and the care you have already received for the pregnancy, you could conceivably have to pay for the birth of your child as well.

Group Insurance Plans

For working moms, the easiest way to obtain health insurance may be through your employer. Thanks to the Affordable Care Act, most employers are required to offer health benefits to their full-time workers, and these policies generally must contain coverage for maternity care.

The exact details of a plan, like the cost of deductibles and co-pays, will vary between insurers, and you will be limited to the options presented by your employer. Most workplaces offer insurance in cafeteria plans, making them at least somewhat customizable, and payments are usually pulled from your wages to allow you to spend pre-tax dollars on premiums.

Individual Insurance Plans

In the past, obtaining private health insurance that covered maternity care was not always easy or affordable. Now, it's somewhat simpler to find a suitable policy by using your state's health insurance exchange. The exchange is a public service set up under the ACA that allows you to comparison shop between multiple insurers. All plans must include coverage for maternity care, and the cost is regulated to ensure that premiums stay affordable. Depending on your income, you may qualify for an insurance subsidy to help cover the cost.

However, not every state has an insurance marketplace, or you may not be satisfied with the options available to you there. In that case, you might wish to purchase private insurance directly from an insurer. The costs will generally be higher than a policy from the exchange, and you will not benefit from government subsidies, but you will have better flexibility in choosing coverage. All big insurance companies offer maternity care policies, including:

Many other insurers offer attractive policies as well. When shopping for individual health insurance, your best bet might be to use a comparison website that will allow you to find a policy that will fit your needs.

Supplemental Insurance Plans

You may find, after reviewing the coverage on your existing policy, that the benefits are not sufficient to cover your expected maternity costs. In this case, it may be beneficial to purchase a supplemental insurance plan. Note that you should look into buying supplemental coverage before you become pregnant as you may have to wait before benefits become available, leaving you paying for some expenses out of pocket until the waiting period is over.

When shopping for supplemental coverage, you won't find "maternity insurance" as an option. Instead, you'll want to look for "hospital indemnity" insurance. This is coverage that pays a flat rate of benefits for any situation requiring a hospital stay, including having a baby. Most people use these indemnity plans to cover the cost of deductibles or copayments. An added benefit of supplemental insurance is that it can be used for other hospital stays, extending its usefulness beyond the birth of your child.

Many companies sell supplemental insurance, including many life insurance companies. You may be able to obtain supplemental insurance through your employer or purchase a policy on your own.

Insurance Coverage Alternatives

Medicaid

The cost of maternity insurance is not within the budget of everyone. In cases of low income households, applying to Medicaid may be the answer to receiving the medical care during your pregnancy that is necessary to ensure you give birth to a healthy baby, and in the event your baby is born with health problems, he will get the care he needs without you and your family going bankrupt. To find out if you qualify for Medicaid, visit Centers of Medicare and Medicaid Services.

AmeriPlan

This company is not an insurer. Instead, it's a DMPO (discount medical plan organization) providing healthcare alternatives to people without insurance. It works by partnering with willing service providers who offer discounted care. Such discounted healthcare may not be available in all areas, but it may be worth looking into AmeriPlan in your area to see whether this could be an option for you.

Payment Arrangements

While your doctor may require payment for prenatal visits at the time of the visit, hospitals will often work with you to set up a payment plan, or prepayment plan for the cost of a normal delivery. If you have no insurance and there are complications or your baby ends up in Neonatal Intensive Care Unit (NICU), you could be looking at long-term debt, but do not be afraid to negotiate with the hospital for better terms once everyone is out of the hospital.

Savings

By planning your pregnancy well ahead of time, you can save and invest the funds necessary to pay your pregnancy costs out of your own pocket. Depending on the situation, this can sometimes cost less than what you would pay for a maternity insurance rider. However, it's difficult to save for unexpected complications and expenses, and you can be caught unprepared if you end up requiring special services like NICU or an emergency C-section.

Planning for Your Baby's Future

Having a baby is an expensive undertaking and should only be entered into after careful consideration. Financial consequences are only one facet of that consideration. Take the time to review your current financial situation, your health insurance coverage, and discuss your options with your employer and an insurance agent or financial consultant who can answer question that relate to your specific situation.

Understanding Maternity Health Insurance