6 facts about pregnancy insurance and supplemental policies

Angela Tague
June 19, 2017
6 facts about pregnancy insurance and supplemental policies

Brainstorming names. Buying a crib. Picking birth announcements. There are many exciting aspects to family planning that make you coo, well, like a baby. But before taking the plunge into pregnancy, research how much is covered by the pregnancy insurance coverage within your medical plan and decide if you'll need more insurance.

Start with these six facts about maternity insurance.

1. Expect to pay about $2,500

If your employer offers commercial health insurance coverage, expect to be billed approximately $32,093 for a vaginal birth or $51,125 for a cesarean birth, according to a January 2013 report by Truven Health Analytics. After your insurance provider pays their portion, out-of-pocket costs for vaginal births average $2,244. Cesarean births are more expensive, averaging $2,669.

2. Pregnancy-only insurance doesn't exist

It's a common misconception that pregnant women not covered under an employer-sponsored insurance program can buy an insurance policy with an independent insurer to cover the cost of her pregnancy. There's no such thing as a stand-alone maternity insurance policy, explains Kevin Haney, owner of A.S.K.

Benefit Solutions, a licensed health insurance agency in New Jersey that focuses on helping growing families find suitable insurance policies to cover pregnancy. He says, "the only people buying the policies would be almost certain to utilize the benefit, and then cancel coverage shortly after childbirth," which would end up not being cost effective for the insurance provider.

3. Supplemental insurance requires research

Supplemental health insurance policies differ from standard health insurance plans. These add-on policies "cover limited medical conditions, treatments or risk, rather than cover almost everything" according to Haney. But, these policies may be limiting.
Dr. Sherry Ross, an OB/GYN who operates a private practice in Santa Monica, California, reminds her patients to make sure their insurance will cover the obstetrician they desire and the hospital where they'd prefer to deliver. She also advises expecting patients to "ensure there is coverage for the pediatrician and specialists (just in case) such as a perinatologist, neonatologist and anesthesiologist" if any complications arise.

4. Secondary insurance may cover extra costs

Standard health insurance plans can often be coordinated with secondary insurance. For example, if both parents have medical coverage offered by their employers, one plan will serve as the primary coverage, and the other as secondary coverage to pay costs not covered by the first plan.

When you might need more insurance

For pregnancies without anticipated issues, the pregnancy insurance coverage on a standard medical plan is usually adequate. But, what if you're expecting multiples or have a high-risk pregnancy? These insurance options might be a good idea.

5. Disability insurance can replace your lost income

One supplemental insurance option to consider is disability insurance, although it can be costly. Dr. Ross explains that for women who "have a history of chronic medical problems or expect to have twins (or more), then short-term or long-term disability is something to consider."

Disability coverage can become a much needed source of income. Haney explains that many policies pay "a six-week benefit for vaginal delivery and an eight-week benefit for C-section birth. Half of women need to stop working prior to delivery, and the policy may replace income for medically based complications of pregnancy."

6. Hospital indemnity insurance can help cover lengthy stays

Hospital indemnity insurance is another supplemental insurance used to prepare for the cost of labor and delivery. Depending on the policy, coverage ranges from the mother's admission to the hospital for a normal labor and delivery to an ill infant's stay in a neonatal intensive care unit. Haney says this supplemental insurance is usually cost-effective because a "hospital indemnity may pay $3,000 per admission and cost $45 monthly."

How to find and choose policies

Supplemental insurance policies are not sold as stand-alone products. Instead, they are bundled into employee-sponsored medical insurance packages. Read plan options carefully and choose add-on policies that best fit your plans for the coming year. If you want to start or grow a family, then disability, hospital indemnity or other programs — such as a flex spending account or paternity leave benefits — might be helpful.

Make supplemental insurance policies benefit your upcoming pregnancy by planning ahead. Many policies are only available to women prior to conceiving. Read policy coverage statements carefully, ask about limitations on preexisting conditions and learn when the policy takes effect — which is usually nine months after signing a contract. 

Angela Tague is an over-exuberant planner, which means she personally has multiple insurance policies and loves to write about preparing for what-if moments. She also writes about parenting and lifestyle topics for Fit Pregnancy, Trusted Choice Insurance and Parenting.

*The information contained in this article should not be used for any actual caregiver relationship without the advice and guidance of a professional advisor who is familiar with all the relevant facts. The information contained herein is general in nature and is not intended as legal, tax or investment advice. Furthermore, the information contained herein may not be applicable to or suitable for your specific circumstances and may require consideration of other matters.

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