Beginning January 1, 2014 the Patient Protection and Affordable Care Act (PPACA) stipulates that all health insurance plans must cover ten essential health benefits including maternity, and newborn care.
For growing families this means getting pregnant and delivering a healthy baby will be far more affordable than ever before. But it does not automatically mean that every pregnancy will be more affordable. Those that experience complications, premature birth, or a sick infant may pay far more than in the past.
- What is included in essential health benefits?
- Who pays less under the new ACA provisions?
- Who pays more and why
- How this affects your plan choice
What is included in the “Essential Health Benefits”?
The Department of Health and Human Services (HHS) is charged with writing the rules under the Affordable Care Act. There are three essential health benefits baked into maternity insurance under ObamaCare. In February of 2013 the department established ten essential health benefits as listed below:
- Ambulatory patient services
- Emergency services
- Maternity and newborn care
- Mental health and substance use disorder services, including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care
Perhaps of greatest interest to growing families is the requirement that maternity and newborn care, hospitalizations, and pediatric services be included in health plans.
Who Pays Less under ACA Provisions?
Prior to enactment of ACA couples planning to have children found it very difficult to find health insurance that covered normal maternity care and childbirth in a hospital. Unless mandated by a state insurance law, most carriers chose to offer maternity riders plans only. These riders required either a long waiting period, or a large deductible.
The majority of parents will pay far less than before, because the majority of pregnancies are healthy. Parents experiencing a healthy pregnancy and normal childbirth, and living in a non mandate state are the clear winners. Their health plan will now cover most of these expenses. In the past many parents had to pay out of pocket for these “essential health benefits”.
Parents of children with special needs may find some relief under the ACA essential benefits. Children with special needs often have poor dental hygiene, along with ongoing medical and vision needs. Parents can now purchase policies that cover all their children even if they have preexisting health conditions, and cover maternity related expenses for subsequent children that parents choose to bring into this world.
Who Pays More and Why?
A minority of parents may pay far more than before, because a minority of pregnancies is unhealthy, and ACA provisions may leave these parents exposed to greater out of pocket costs. About one third of parents will experience high-risk pregnancies, complications prior to delivery, premature birth, or a sick infant.
Expenses pile up quickly when one of these pregnancy related conditions occurs. The ACA mandates five plan choices allowing for actuarial values ranging as low as sixty percent. This means parents may be exposed to paying forty percent of a very large number.
Compare this outcome for the parents to an older plan covering a higher actuarial value, but excluding normal pregnancy. The parents save a little on the normal pregnancy, but spend far more when complications arise. This topic is explored in more detail in a separate article entitled “Maternity Benefits More Social Policy than Insurance under ObamaCare”.
How this affects your Plan Choice
There are many variables that go into making the optimal plan choice. Understanding the essential health benefits component is but one factor. These are the other items to consider:
- Choosing between five plan designs
- Eligibility for government subsidies
- Buying group plans at work or individual policies
- Open enrollment timeframes
- What if you are already pregnant?
- Variations at the state exchanges
Supplemental maternity insurance is not impacted by the Affordable Care Act. You can purchase these policies no matter what plan choice you make, with no waiting period, deductibles, or out-of-network considerations.