You might not have needed to deal much with health insurance before. That’s all about to change, because pregnancy brings with it a multitude of office visits, tests, and procedures, not to mention the delivery — and all of those bring bills. Here’s a primer to explain the terms you will encounter.
This is the amount of money you spend out-of-pocket on health care before your insurance kicks in. Your deductible is going to be the biggest driver (or one of the biggest) of how much your pregnancy and birth will cost you out-of-pocket. The way most plans work, you have to pay the amount of your deductible before your insurance benefits “kick in” and start covering most costs. You can assume you will spend at least your deductible when you have a baby. In some cases, if your pregnancy spans two “plan years” you will have to pay this amount in each year. If you are planning a pregnancy and you have an option to lower your deductible, it usually makes sense to do so.
HSAs and FSAs
Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are accounts that you put money into before taxes, which is set aside to pay for health expenses. Because you don’t pay tax on this money, it’s like getting a 10 – 40% discount on all of your healthcare bills, depending on your income tax bracket. Money in Health Savings Accounts can be used to pay for out-of-pocket medical costs and the costs of some non-covered services like certain classes, over-the-counter vitamins and medications, and even a doula.
Flexible Spending Accounts (FSAs) may be used for similar health-related costs, and some FSAs also can be used to set aside pre-tax money for childcare. The important thing to remember about FSAs is that if you don’t use the money in the same year you save it, you lose it.
The amount of money you pay each month to have insurance. Sometimes your employer or the government pays for all or part of the premium.
If a provider or facility is “in-network”, this means they have agreed to a discounted rate for providing services. Every provider, hospital, birth center, lab, etc. has the opportunity to enter into contracts with insurance companies. By accepting a discounted fee from the insurance company, the provider/facility can offer their service for lower out-of-pocket costs to clients/patients. Most providers/facilities (including Baby+Company) will bill your insurance directly whether or not they have a network contract with your insurance plan (whether they are “in-network” or “out-of-network”). More of the cost of the visit will be passed on to you if you use an out-of-network provider, and out-of-network services may count differently toward your deductible or out-of-pocket maximum.
The absolute maximum you will pay during the year for healthcare. In the worst case scenario, this should be the maximum spent on healthcare in the plan year.
Typically, there is just one or two times a year when you have a chance to switch insurance plans. The exception is if you have a qualifying event. Getting married, changing jobs, and having a baby are all qualifying events that enable people to enroll in new insurance plans even when it is not the usual enrollment period. This means you can shop around and potentially lower your costs or find a plan that lowers your out-of-pocket expense for your preferred provider. If you are married and both spouses have access to employer plans, you can choose which one to be on. You may also shop on the insurance exchange or check eligibility for state-sponsored benefit programs or Medicaid (you can do this at any time and do not need a qualifying event).
So, what makes up your maternity bill?
As if insurance isn’t confusing enough, figuring out what medical expenses you will face also requires understanding the parts of your total bill for services. A helpful analogy for how we pay for maternity care is to imagine you are bringing your car in to get fixed. Your bill is broken down into “service” and “parts”. In healthcare, you also pay for the “garage” (“a facility fee”), and it’s often the largest expense.
The hospital facility fee for most people accounts for more than half of the total bill (about 60%). Your insurance plan may cover the cost of most of this, but it can still leave you with a large out-of-pocket expense depending on your deductible and copayments, and what the hospital charges (it can vary dramatically from hospital to hospital).
The next largest fee is usually the global professional fee, which pays for your routine visits with your midwives and/or doctors as well as their birth. At Baby+Company, the global fee includes the facility, too, for clients who give birth in the birth center.
There are separate fees for tests like blood work or ultrasound, anesthesia (epidural), and your baby’s care. These are usually smaller relative to the “big ticket” facility and professional fees.
Unfortunately, with the uncertain nature of pregnancy and birth and the lack of transparency about prices, it is impossible to know for sure what your out-of-pocket expense will be. To get as close an estimate as possible:
- Know your deductible – you will usually spend at least this much.
- Know your out-of-pocket maximum – you generally won’t spend more than this.
- If you are shopping around, focus on the prices for the facility fee and global professional fee. These two fees will make up the large majority of the cost and have the most variation from practice-to-practice or facility-to-facility. Talk to an insurance specialist at the practice, or directly to your health plan, to find out how much of these costs are covered. A Baby+Company insurance specialist is happy to talk through your insurance specifics if you are considering giving birth with us.
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