This Q&A column addresses questions from real patients about health care
costs. Have a question you'd like to see answered? Submit it to AskChristina@nerdwallet.com.
Question:
We are expecting a baby in six months and trying to get an accurate estimate of how much we'll have to pay out of pocket after our health insurance pays its portion. It seems like there's a lot of conflicting information, and the estimates I see online are really varied. Do you have any guidance?
Answer:
Unlike emergency surgery and many other costly medical procedures, childbirth is one you can plan for in advance, so trying to get the best estimate of your cost-sharing responsibilities is a smart move. You're right, however, in that conflicting information abounds -- in part due to the lack of standardization in health care costs, but also due to geographical differences and the endless variety in health insurance policy specifics.
A 2013 study from Truven Health found the total price of childbirth to vary by more than $10,000 from state to state. Out-of-pocket costs passed on to insured new parents averaged $2,244 for vaginal births and $2,669 for cesarean. When you figure in all maternal care (including prenatal), those out-of-pocket shares went up to $12,520 and $16,673, respectively. It's obvious: Having a baby is expensive and price tags are all over the place.
Understanding your cost of childbirth involves having a good grasp of your health insurance coverage, getting specific on costs and your share of the burden and looking at your options for saving money.
What does your policy say?
It's time to get up close and personal with your health insurance. Paying a copay to see your OB-GYN is pretty easy to understand. But when it's time for labor and delivery, you'll need to understand how deductibles and coinsurance work, among other things.
Your deductible is the amount you have to fork over in applicable charges before your insurance provider starts kicking in a bigger share. Your coinsurance is a portion of the total charges you'll pay once the deductible is met.
Let's say you have a $2,000 deductible and a 20% coinsurance, and your total applicable charges are somewhere around $5,000. You'll end up paying $2,600 ($2,000 to meet the deductible, plus 20% of the remaining $3,000).
Most aspects of labor and delivery are subject to the deductible (meaning you won't pay that simple copay). But there's a good chance you'll meet your deductible during the prenatal process, and be left owing only coinsurance. Keep track of how close you are to your deductible throughout those initial nine months to help you more accurately estimate your share of costs.
Make some calls and get specific
Every policy is unique, so call your insurance company and nail down these specifics as soon as possible. Anytime you speak with an insurance representative, take down his or her name and the date you spoke, in case you need to document it later.
In addition to asking about your deductible and coinsurance amounts, ask whether you'll need pre-authorization for any of your care, how long a hospital stay is covered after delivery and which common labor and delivery charges may not be covered.
If you're interested in any nontraditional birthing options -- using a doula or midwife, or having a water birth, for instance -- make sure to ask about them as well.
Next, you'll call the birthing center's billing office. Often, when a hospital knows you'll be having your baby there, they'll help you estimate costs before you're ever admitted. Again, make a note of who you talk to and when, in case questions arise down the road.
A word of warning: Unless your doctor uses something known as "global billing," and you cross into a new year before delivering your baby, you could end up paying two years' worth of deductibles. Global billing avoids this by packaging your prenatal care along with your labor and delivery costs, billing only once after your baby is born. Ask your doctor's office about their global billing practices. If this is their standard approach, they'll go over the anticipated charges with you after they contact your insurance company for coverage specifics.
Keep in mind throughout this process that the numbers you receive on these phone calls are estimates. Many things can happen during the birthing process to change those numbers -- an emergency C-section, for instance. Having a general idea of what to expect and then taking steps to lessen your cost-sharing burden is the best way to prepare.
Making choices to save money
Perhaps one of the biggest cost-affecting decisions of your pregnancy will be in choosing the hospital and medical providers you see. Your health insurance contracts with certain providers and facilities to provide care at a discounted rate. Go outside this network and you face a far heftier price tag.
Make sure your doctor(s) and the hospital you choose are part of your policy's network. Ask the providers themselves, but confirm their network status with your insurance company.
If you have money set aside in a flexible spending account (FSA) or health savings account (HSA), now's the perfect time to use it. These dollars came out of your paycheck pre-tax and are a great way to save on your out-of-pocket responsibilities. Unlike an FSA, changes in your HSA contribution amounts aren't limited to open enrollment -- you can change them as needed throughout the year. So, in light of your new family member, you may want to increase the money you're setting aside for out-of-pocket medical expenses.
Finally, when you're home with your new baby and start receiving explanation of benefits (EOB) statements from your insurance company and bills from medical providers, review them all. Don't accept the "amount due" at face value, as medical bill errors are relatively common. Review the charges and don't be afraid to call and ask questions. The opportunity to save on medical bills doesn't stop after the service is provided.