Some resources suggest that the average cost of having a baby with health insurance hovers around $5,000 – however, a median figure sets parents up for failure.
For example, Medicaid recipients might pay less than $500, while those with individual coverage could owe $8,550. A January birth instead of December could balloon the bill to $17,100 when the plan resets.
But that is not all. An infant beginning life in Neonatal care could double your exposure, and an out-of-network specialist could leave you with an extra balance bill.
The annual Maximum Out-of-Pocket (MOOP), the provider directory, and programs to help with remaining hospital bills are the critical tools to manage your finances.
Out-of-Pocket Pregnancy Costs
Four plan features help determine your unreimbursed cost of pregnancy with health insurance. Also, your choice of providers has an enormous impact on how each of these elements works.
- Deductible: the covered services you fund before insurance starts
- Copayment: a fixed amount you pay for each visit or service
- Coinsurance: a percentage of the allowed amount you pay
- Maximum Out-of-Pocket (MOOP): limits annual unreimbursed expenses
Medicaid
The out-of-pocket cost of pregnancy with Medicaid insurance is typically the lowest by far because the government throttles back the four expense sharing components for low-income families.
Having insurance already does not disqualify you. Therefore, check out the Medicaid income limits in your state to see if you are eligible. The savings could be enormous!
Medicaid expenses sharing levels are minuscule compared to private coverage, and varies by household income, often expressed as a percentage of the Federal Poverty Level.[1]
| 100% FPL | To 150% FPL | 151% + FPL | |
|---|---|---|---|
| Deductible | $2.65 | $2.65 | $2.65 |
| Copayment | $4.00 | 10% of Charges | 20% of Charges |
| MOOP | 5% of income | 5% of income | 5% of income |
For example, a pregnancy Medicaid recipient with a family income of $20,000 would face an individual maximum of $1,000 in unreimbursed expenses in a plan year, which is considerably lower than the $8,550 limit found in the private marketplace.
High Deductible
People asking about the out-of-pocket costs of pregnancy with high deductible health insurance are examples of focusing on the trees rather than the forest. Your deductible is but one of three expense-sharing features – and often not the biggest.
Pregnant women over-utilize healthcare with prenatal care, ultrasounds, genetic testing, and then childbirth at home or in the hospital. The copayments and coinsurance add up quickly, regardless of the size of your deductible. Therefore, the MOOP is of far greater concern, and your choice of providers has an enormous impact on this element.
In-Network
The out-of-pocket cost of having a baby with insurance is much lower when you use in-network providers exclusively – including high deductible plans. In-network OB-GYNs, hospitals, and anesthesiologists agree to accept the allowed charges as full payment for services rendered.
The insurance companies use their bargaining power to negotiate lower rates from in-network providers and then calculate patient expense sharing features using the discounted allowed charges.
In this case, the MOOP is the annual limit of your exposure to deductibles, copayments, and coinsurance based on the allowed charges.
- $8,550 Marketplace Individual (2021)
- $17,100 Marketplace Family (2021)
Out-of-Network
The unreimbursed cost of having a baby with insurance is often much higher when the family inadvertently chooses out-of-network providers – especially those with high-deductible plans.
In-network OB-GYNs, hospitals, and anesthesiologists do not accept the allowed charges as full payment and might balance bill the difference. Therefore, become very familiar with the provider directory published by your insurance company, and verify their status.
- Participates in means the allowed charge is all that you owe
- Accepts means they cash claim checks and bill above the allowed amount
Patients using out-of-network providers frequently encounter two surprises that can prove devastating financially because their expenses are unlimited.
- A second-higher deductible for out-of-network care
- The MOOP does not include balance bills above the allowed amount
Blue Cross
Many expectant parents ask about the out-of-pocket costs of pregnancy with a specific insurance company such as Aetna, Blue Cross Blue Shield, Cigna, Kaiser, Tricare, and so on.
Asking about a particular company is an example of a poorly framed question. Each entity issues a wide array of plans with different deductibles, copayments, MOOPs, and provider networks.
For example, Blue Cross Blue Shield (BCBS) is a national federation of affiliated companies using this trade name. BCBS is thirty-six different independently operating local organizations rather than one – and each entity can issue many other plans in the group, individual, and public (Medicaid compliant) markets.
A better strategy would be to consult the plan document for these answers.
Childbirth Costs with Insurance
The provider choices you make during your pregnancy have the most significant impact on cost during childbirth as labor and delivery is the most expensive stage – even with health insurance. Plus, things do not always go the way we planned, and luck plays a massive role in your final bill.
Nobody can control two things that could dictate your left-over expenses: your due date and the health of your infant.
Deductible Resetting
The date of your labor and delivery can significantly impact the cost of childbirth with insurance, depending on where it falls in your plan year. The expense sharing features reset once annually following a fixed schedule, whereas a pregnancy can begin at any time and lasts for nine months.
October is the best time to deliver a baby because all pregnancy stages fall safely into a single plan year – assuming your plan resets on January 1.
- Prenatal care
- Ultrasounds
- Genetic testing
- Hospital birth
- Two month NICU confinement
However, women with other due dates could face a reset and need to satisfy the deductible and MOOP twice. A reset could push your in-network exposure from $8,550 to $17,100.
Double Deductibles
The cost of childbirth with insurance can double, triple, or more when your infant begins life in Neonatal Intensive Care – which occurs approximately 12% of the time. Having a preemie that requires specialized care in the NICU engages two new expense sharing elements.
- A second deductible for your infant
- Higher family MOOP of $17,700
Then, premature infants born in November or December could remain in the NICU, setting off the need to satisfy another deductible and MOOP after these elements reset on January 1.
Finally, the specialists caring for your infant, such as Neonatologists, are more likely to be out-of-network with your plan – meaning unlimited balance billing.
Paying Hospital Bills after Birth
As you can see, many new parents might need help paying hospital bills after their baby’s birth – even when they have health insurance. Any combination of plan year resets, premature or sick infants, and use of out-of-network providers could result in excessive unreimbursed charges.
Taking out a personal loan could get the hospital collections department off your back but add to your costs with origination fees and interest charges. Negotiating a payment plan could be a better alternative, as might settlement programs and assistance for preemies.
Can’t Afford Deductibles
New parents who cannot afford their insurance deductibles after birth cannot fund the much larger MOOP they must satisfy. However, there is a silver lining to financial hardship.
Debt settlement programs could help you discharge a significant portion of your hospital obligation over time – provided you show that you cannot keep current on all of your payments.
- Stop paying all unsecured creditors
- Redirect the funds to an escrow account
- Use money accumulated in escrow for negotiation
- Immediate partial payment
- Forgiveness on the remaining balance
NICU Charges
New parents of premature infants face the most unaffordable hospital bills after birth because they might have to fund two insurance deductibles, two MOOPS, and could have out-of-network balance bills from a prolonged stay in the NICU.
Two strategies could help you to cope.
- The federal government supports premature babies financially through the Supplemental Security Income program (SSI) and the tax code. Large unreimbursed medical bills are tax-deductible.
- Medical bill financial assistance programs come in many shapes and sizes that can help parents of newborn preemies chip away at sizeable unpaid hospital charges.
Footnoted Sources:
[1] Medicaid.gov Cost Sharing Components