How to Choose the Best Insurance Plan for Pregnancy

Choosing the best insurance plan for pregnancy is easy with this guide from the Budget Diet.

Having a baby is an exciting life event. Your family is growing, and your life is changing in a significant way. While pregnancy can insight a greater focus on your health, it is also important to plan for your financial future. Having the right insurance coverage can mean the difference between spending your time bonding with your new baby and worrying about paying your hospital bills. Here at the Budget Diet, we have compiled a list of the best insurance plans for pregnancy.

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Why Do I Need Coverage?

While pregnancy is often a wonderful time in your life where you are growing a healthy addition to your family, this is not always the case. In fact, many recent celebrity pregnancies have brought attention to the fact that for some women, pregnancy itself can call for many medical interventions.

While many women enjoy and happy and healthy pregnancy, it is not always a happy 40 weeks. Even celebrities and the royal family are not immune to pregnancy complications. 

The Duchess of Cambridge, Kate Middleton, first put hyperemesis gravidarum (also known as HG) into the spotlight.  The condition causes extreme nausea and vomiting during pregnancy. The condition made headlines when she was admitted to the hospital. 

Comedian Amy Schumer is currently pregnant with her first child. She shared that she is also battling the condition with her followers on Instagram. The condition typically causes weight loss and electrolyte disturbance. 


The Effects of Hyperemesis Gravidarum

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While HG has only recently gotten media attention until the 1950’s HG was closely tied with maternal death. In fact, despite modern medicine, the condition can still be fatal. HG is present in up to 2 percent of all pregnancies, and it accounts for over 375,000 pregnancy discharges in the U.S. annually.

In addition to the condition affecting the expecting mother’s life, some studies suggest that severe nausea can also have an impact on the unborn child.


The Cost of a Premature Birth

One study suggested that pregnancies, where the morning sickness interfered with the mother’s day to day life, were 23 percent more likely to end before 34 weeks. Also, they were also 31 percent more likely to suffer from high blood pressure and preeclampsia.

According to the Center for Disease Control (CDC), almost one in 10 babies are born prematurely in the U.S. each year. It was estimated by Managed Care Magazine that the average cost for a baby admitted to the NICU was $3,000 a day.

The average cost to an employer for the delivery of a full-term baby at 40 weeks is $2,830. The average cost of a premature baby is $41,610. That cost can rise to $250,000 or more for a baby born at 26 weeks.

Baby in an incubator
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So now that you know all the scary reasons you need coverage during pregnancy and childbirth, let’s explore your options.

There are several ways in which you can obtain insurance coverage. These include:

  • Through your workplace
  • Get added to your spouse's insurance
  • A parent (if you're still under the age of 26)
  • The health insurance marketplace
  • Contact an insurance company directly
  • Medicaid

One of the best places to seek out health insurance is through your or your spouse’s employer. This is because often employers will share in the cost of the monthly premiums.

Medicaid is not only a great asset for any lower-income family, but it also does not have a set open enrollment period so that you can apply for benefits at any time.

woman making a heart over a pregnant belly
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A government-run marketplace plan can qualify for financial help to lower the cost of premiums or out-of-pocket costs.

Private plans outside the marketplace may offer maternity benefits, but there can be a moratorium put in place. A moratorium is a set amount of time that you must wait before putting in a claim. These moratoriums typically last 10-12 months. During this time any claims associated with a pregnancy or birth would not be covered, and the insured would be expected to pay these claims out of pocket. This means that you need to pay for your maternal benefits for at least a year before you expect to need to use them.


The Good News

The good news is that all Health Insurance Marketplace and Medicaid plans cover pregnancy and childbirth. This is true even if your pregnancy begins before your coverage takes effect. The tricky part is that while having a baby qualifies you for a Special Enrollment Period (SEP), becoming pregnant does not.

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A SEP is a life event that qualifies for a change of coverage. This means that after you have your baby, you have a 60-day period in which you can enroll in or change your insurance coverage outside of the open enrollment period. Your employer will determine the open enrollment period for employer coverage. The federal government will determine the open enrollment period for marketplace coverage.

When you enroll in a new plan, your coverage can be effective from the day your baby was born. If you currently have coverage, you can add your baby to your plan or change to a new plan that better suits your needs.  


Pregnancy is not a Pre-existing Condition

Under the 2014 Affordable Care Act, maternal coverage was mandated as an essential health benefit. This act determined that essential health benefits must be covered on any plan. It also stated that women could not be turned away or charged more because they are pregnant.  The coverage includes pregnancy, labor, delivery, and newborn baby care.

image of an empty delivery room
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Before 2014, maternity coverage was not a required benefit, and only about 12 percent of plans provided this type of coverage. For many plans, maternity care had to be added as a special rider. Also, pregnancy was seen as a pre-existing condition. Women who were pregnant while seeking insurance were either unable to get coverage or had to pay substantially more.

This still may be the case for some “grandfathered” plans purchased before 2010 may defer to the old regulations, so always check with yours on the specifics.


Covered Maternity Care Services

  • Outpatient services, which includes prenatal and postnatal doctor visits, gestational diabetes screenings, lab studies, medications.
  • Inpatient services, which includes hospitalization and physician fees.
  • Newborn baby care.
  • Lactation counseling if necessary and breast pump rental.

Also the following services are available to women who are pregnant or may become pregnant without charging a copay or coinsurance.

Services for Pregnant Women or Women who may Become Pregnant

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These services are provided free, even if you have not yet met your deductible, but only if they are performed by an in-network healthcare provider.


What if I Don't Have Insurance?

Insurance is an important tool to protect your family’s financial future. According to the American Pregnancy Association, Without insurance coverage, you can anticipate paying around $10,000-$12,000.

In 2011, the average cost of vaginal delivery in a hospital was $10,657. This can increase by 50 percent or more if you have a scheduled or emergency C-section. The cost for either can increase dramatically in birth with complications.


Do You Qualify for Medicaid?

Image of a baby
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If you find yourself pregnant and uninsured, don’t worry. There may still time to find adequate coverage for you and your new family.

Approximately half of all births were paid for by Medicaid in 24 of the 50 U.S. states. These stats were collected by the Kaiser Family Foundation and based on the latest year reported.

If you don’t have insurance and have a lower income (based on the federal poverty level), you can apply for coverage through Medicaid or the Children’s Healthcare Insurance Program (CHIP). CHIP provides low-cost health coverage to children in families that earn too much money to qualify for Medicaid.

Click here to see if you qualify for Medicaid based on your income.

The good news about Medicaid is that unlike traditional insurance programs it does not have an open enrollment period. This means you can apply for coverage at any time. Medicaid is a good option for lower-income families. Unlike traditional insurance policies, Medicaid is funded by the state and the federal government. 


Understand What Your Policy Offers

The introduction of the Affordable Care Act mandated insurance plans to include maternal benefits. Although a wonderful step forward, this coverage may not cover every procedure you require. 

It is important to call your insurance company to discuss potential costs upfront. It is important to know what is and isn’t covered under your policy. Once you know your potential costs, you can budget for any amount you may end up owing once your little one is delivered.

Here is a list of questions to ask your insurance company about your coverage:

image of a woman giving birth
Image Source: Canva
  • What is the estimated cost of vaginal birth?
  • Do you have a list of maternal services that are covered in my plan?
  • How much is the estimated cost of a c-section? 
  • How do these services fulfill my deductible? Be sure to take this amount into consideration when planning financially.
  • Is my preferred doctor and hospital in the network? (Services are only free when provided by healthcare professionals or practices considered in-network)
  • How are delivery services like visits from additional staff or anesthesiology going to be billed? Are they billed as in-network automatically?
  • Will my baby be charged a separate fee once born?
  • Do I need to call my insurer for pre-approval before I go to the hospital to give birth?
  • Am I able to have a home birth?
  • Am I able to use a midwife or doula?
  • How late in my pregnancy can I order my free breast pump?
  • Is the six-week postpartum checkup covered?


Get Financially Ready

Once you have asked your questions, it is time to determine how much you need to save for out of pocket expenses. To do this, you need to determine the following amounts.

Premium: This is your plans monthly cost to access services.

Deductible: This is what you are responsible for paying out of pocket before your plan kicks in to cover the rest of your healthcare costs

Copayment (or Copay): This is the set amount you are required to pay for specific services such as doctor visits or medications.

Co-insurance: This is what you pay for covered services and treatments. This charge may be calculated as a percent of the total cost rather than a set amount. 

While calculating this amount, inquire if your policy has a out of pocket maximum. Some plans offer this perk, which caps the amount of co-insurance you pay once it reaches a certain amount.

Check out five types of insurance you shouldn't waste your money on. 


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Two more terms that you will notice when shopping for insurance plans are HMO and PPO. HMO and PPO are the two most common types of provider networks. HMO stands for Health Maintenance Organizations and PPO stands for Preferred Provider Organizations.

In general when choosing between these two types of plans each offer a potential benefit and drawback. In general, HMO plans are less expensive but offer fewer in-network doctors. PPO plans offer more choice in physician but it comes at a higher cost.


What is a HMO?

A HMO plan requires you to receive your medical care from a specific pool of healthcare professionals. Going outside of the ‘network’ to receive care could make you responsible for paying the bill in full.

If you travel often you may want to inquire about out of area coverage.

Check out everything you need to know about travel insurance

If you don’t currently have a primary care physician you can register with one associated with the HMO. You may discover your preferred physician is already within your HMO network. 

You need to see your primary doctor for a referral to a specialist. In the case of an emergency this rule is no longer valid and you are able to seek immediate help where available.


What is a PPO?

A PPO is a plan that offers coverage from a pool of specified healthcare professionals, but also allows you to see professionals outside of the pool as well.

Unlike HMOs, PPOs do not require you to see your primary care physician for referrals. You are able to go directly to a specialist for treatment. Although the costs could vary.

With PPOs you are able to see a healthcare professional within their pool for a set fee, going outside the pool is an option, but it will cost you more.

The cost of the visit to a doctor outside of the PPO is not usually a flat rate.  If, for example a visit to the doctor is $1,000 and the cost of your PPO is 30 percent you will see a bill for $300. 

This means that you are able to see a physician outside of the PPO, but it will usually cost much more. 

Take a look at more ways to save on healthcare here. 

How to Tell if Your Doctor is Part of Your Network

If the choice comes down to finding the right physician, you can take advantage of the physician directory. Most insurance plans will provide an online or paper directory which will list all of the providers in their network.

In most instances you can search for a provider by name, facility, type of medicine practised or even gender and languages spoken.

Most directories also include information that can be helpful to determine the physician’s suitability. Information can include their education, experience and philosophy of care.

If you are still unsure how to find the information or if your provider is part of the insurance plan, you can also call the customer service department to double check.

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Our Verdict:

Starting a family is an exciting time, but it can also be a financial stretch. Planning for your family’s future with savings and proper insurance is one way to make a stressful time much more carefree. Prepare for the future by becoming informed of your options. Look into Medicaid, CHIP, and the insurance marketplace to see which plans you qualify for and don’t be afraid to ask the tough questions to know what is and isn’t covered. 

Still looking for a way to cut healthcare costs? Check out 10 ways to cut prescription costs!

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