Having a baby is expensive. By many estimates, you may have to pay a total of $15,000 if you give birth to a healthy baby. If there are medical complications, the total bill can skyrocket. For this reason alone, it pays to have health insurance for both mothers and newborns.
You should understand the types of private and government-funded health insurance that are available. The benefits and features of these plans can vary.
Types of Private Health Insurance Plans
Private insurance can either be:
- Employer-provided group coverage
- Individually-purchased family coverage
Typical health insurance plans include:
Fee-for-service or indemnity plans allow you to choose any medical provider for health care treatment. Following treatment, you pay the bill and then send a claim to your insurer for reimbursement.
Managed care plans provide both insurance and health-care services. Instead of paying every time a medical service is delivered, members pay a fixed monthly fee for health care. This is true even if you don't use any medical service. Managed care programs also offer coverage for a variety of preventive services.
Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs) are among the most common managed care plans.
HMOs generally require members to use their contracted physicians and facilities. Some HMOs have Point of Service (POS) options. These allow members to use medical providers outside the plan's network and still qualify for partial payment.
PPOs generally encourage members to use the medical providers within the plan's network. Members are allowed to use providers outside the network. However, they'll have higher out-of-pocket costs.
Self-funded or self-insured plans are employer-provided health plans. Here, companies insure their own workers instead of buying protection from insurance companies.
Government Funded Insurance Plans
If you can't buy private health insurance, you should check out if you're eligible for a government funded insurance plan.
Medicaid is a state-administered program offering health insurance to low-income individuals. It's jointly funded by the federal and state governments. Eligibility rules vary by state. In some cases, children may be eligible for enrollment even if their parents don't qualify.
Medicaid has special eligibility rules for pregnant women. The reason is regular medical treatment during pregnancy is vital to a good outcome for mother and child. You should reapply for coverage while pregnant if you're denied coverage before becoming pregnant. You may be covered for at least 60 days following delivery if you're accepted.
Depending on your state's plan, your health insurance may be structured in a format that's very similar to private health insurance plans. Insurance companies often run both public and private plans.
Health Insurance Benefits
Health insurance plans contain various benefit provisions. Examples include:
- Hospital-surgical benefits cover inpatient hospital services and surgical procedures, including the cost of diagnostic tests, nursing care and room and board
- Basic benefit provisions may cover specific medical tests, ambulance service and oxygen
- Comprehensive or major medical benefits cover both inpatient and outpatient physician and hospital services not covered under a plan's basic benefits
- Separate riders providing coverage for items such as prescription medications, eyeglasses and other benefits
Health Insurance Restrictions
In addition to deductibles and co-payments, health insurance policies may contain other restrictions:
- Covered medical treatments or services are generally subject to the condition that the treatment must be medically necessary. The insurer may deny payment for care it decides is medically unnecessary, such as experimental or cosmetic treatments
- Expenses are limited to reasonable and customary charges, generally determined by statistical analysis of physicians' charges for particular procedures within a specific geographic area
- Pre-existing conditions are health problems that have been diagnosed or treated before the effective date of the insurance and frequently require waiting periods before coverage is allowed. Under the Health Insurance Portability and Accountability Act of 1996 (also known as HIPAA), if you're eligible for an employee-sponsored health insurance plan, your pregnancy can't be considered a pre-existing condition, nor can pre-existing exclusions apply to your newborn provided your child was insured within 30 days of his or her birth
Affordable Care Act
The Affordable Care Act was signed into law on March 23, 2010. The law contains various reforms to the insurance industry. The goal is to make health care more affordable and to expand coverage. Many of the reforms will take a few years to be implemented. To find out more about these new health insurance reforms, visit HealthCare.gov.
Questions for Your Attorney
- Which health insurance plan is best for my situation?
- Does the Affordable Care Act protect me from being denied coverage because of my pregnancy?
- Am I legally required to have health insurance by the government?