FSA Cuts Hospital Bills
Baby Delivery Costs
Baby delivery costs can be better managed by knowing the tax code, using flexible spending accounts, and purchasing hospital indemnity insurance to cover your normal labor and delivery costs. Look at your insurance policy closely to estimate what your portion might be for your hospital delivery cost for normal labor and delivery, plus consider the possibility of NICU stay for your infant.
Cut Baby Delivery Costs
Parents are often unprepared for the unexpected costs an having an infant in the NICU. Insurance policies are complex contracts, and parents often learn how their coverage works the hard way. Each plan differs. It pays to take a hard look at your policy right away, as fast action can translate into important savings.
A healthcare flexible spending account allows you to make changes to your annual election if your expect large hospital bills. The birth of a child is a qualifying life event. Increase the amount of your contribution to cover these expenses. If you do not have access to an FSA, ask your employer to set one up.
Hospital indemnity insurance is a great way to cover many of your baby delivery costs as your normal delivery is a covered benefit. Also, an extra benefit may be paid if your infant is born premature, or needs to spend time in the NICU for medical reasons.
Hospital Deductible and Co Pays
Know the hospital deductible associated with your health insurance plan. You may have expected paying the deductible for mom, but when your infant stays longer than mom, some plans will charge a 2nd deductible.
Many plans leave you with a daily co-pay for hospital stays. You may end up with a set of co-pays for mom, and another set for your infant - if extra medical attention is required in neonatal intensive care.
Many plans ask you to cover a percentage of the hospital costs. This is called co-insurance. You may have to pay a percentage of the hospital charges for in-network coverage, and often a much higher percentage for out-of-network care. The longer the NICU stay, the higher the amount you may owe.
Out of Network Charges
When your child is seriously ill, you want the best possible care. That sometimes means selecting the NICU in your local area best suited to treat your child. The best place to treat your child may be an out-of-network hospital. That means your insurance plan may pay a smaller percentage of the costs. See all those specialists tending to your infant? Do all of them participate as In-Network providers on your plan? If not, they may bill you at their higher Out of Network rate. You will be responsible for these higher charges.
Usual Customary and Reasonable
Usual customary and reasonable charges (UCR) is an often overlooked component of labor and delivery charges at specialty hospitals. A pregnancy may be proceeding on a normal pace, when all of a sudden complications crop up, or mom goes into labor early. Instead of delivering at the local in-network hospital, you get transferred to a specialty center that is equipped to deal with premature infants.
One important feature of many health plans is the negotiated rate. An an insurance plan member you get the “wholesale” rate for healthcare services. But not every provider participates with every insurance plan. When you have an emergency, you don’t always get transferred to a hospital that accepts the retail rate. Upon discharge, you will be responsible for the difference between the wholesale and retail rates if the hospital is out of network.
Your insurance plan pays on a percentage of UCR. When you use out-of-network providers, you are responsible for 100% of the fees above the UCR limit. The UCR rates are often absurdly low compared to what is billed. This issue is just now getting some attention in political circles, and is the focus of an investigation by the New York State Attorney General. Read how these charges Put the Onus on Parents.
Many couples focus exclusively when looking at typical baby delivery costs. Whether you have insurance or not, there will always be some left over charges that no insurance plan will ever cover. The longer your hospital stay for you and/or your infant, the higher these charges might total.
Did you want a television in your room to help pass the time while in labor? Many hospitals charge a daily fee for access to the outside world. See those signs discouraging cell phone use? If you have a phone in the room, expect to possibly see a bill at checkout.
If your husband, parents, in-laws and others came to visit they all incurred some type of travel expense. Gas has gotten very expensive these days. And where did they park? Many hospital charge guests to stay in one of their lots. And where did they eat? The list goes on and on. Insurance plans don’t cover these types of items. But they do add up quickly.