Individual Health Insurance: The Maternity Coverage Gap

Individual health insurance with maternity coverage has become an oxymoron in the United States. An oxymoron is a figure of speech that combines contradictory terms such as: dark light, living dead, etc. The terms have become contradictory because of market forces: the only people willing to buy maternity coverage plan to use the benefit. Insurers respond by eliminating coverage from basic plans and creating maternity riders designed not to appeal to couples planning a pregnancy; which leaves many couples with very limited options. Fortunately, a hybrid option exists.

The costs of covering a planned normal pregnancy are quite high: $6,000 to $12,000 depending upon the type of delivery. If you have group health insurance your plan likely covers normal labor and delivery as the Pregnancy Discrimination Act requires group health plans to cover normal pregnancy. But there is no such law governing plans issued in the individual market, and insurers have grown wary of offering plans that cover normal delivery in this market: the only people buying coverage plan to use the benefit.

Maternity Insurance Riders

Insurers have responded to this market based dilemma by eliminating maternity coverage from base plans and introducing maternity riders. The rider structure allows them to market competitively priced plans to the majority not planning on having children, and the option to upgrade coverage for those who are. However, the population segment interested in the rider plans to generate $6,000 to $12,000 in incremental claims (and far more if complications arise). A rider priced at the mid point – $8,000 in additional annual premium would be outrageously expensive.

Long Waiting Periods

So instead they offer riders with long waiting periods and/or long deductibles. These features limit the benefit to almost zero, but do minimize the sticker shock. The insurer has found a way to offer coverage without losing money on a planned event. But the potential customers (couples planning to have children) are left scratching their heads about the value.

A long waiting period forces couples to pre pay premiums in advance of using the benefit. But many couples decide to start a family right away. Waiting twelve months BEFORE getting pregnant is just not an option for many. Waiting an additional twelve months makes matters worse if a couple is nearing the end of their age based fertility window.

Large Deductibles

Deductibles are structured in an insurers favor. Should you pay an additional $300 per month for a maternity rider with a $5,000 deductible? If you have a simple delivery the policy may cost more than you receive in benefits. But that’s the idea behind insurance. It’s there to cover you in case of the unexpected, not something you are planning to do.

Supplemental Insurance

Supplemental insurance sold as a voluntary employee benefit offers a hybrid solution to the maternity coverage gap. Because they are sold through employer groups, normal labor and delivery is covered. Because they are voluntary, there is no direct cost to employers to make the option available to all employees. Couples can purchase individual health insurance for basic needs, and add supplemental insurance instead of a devalued maternity rider.

What Will California Health Insurance Look Like In 2012?

California Governor Jerry Brown has signed several new laws that are geared to expand consumer protection for consumers shopping for California health insurance. The census data indicates that almost one in five Californians need health care coverage. With the new health care laws ready to be implemented, they are predicting that these laws could make 2012 a memorable year.

New California Health Insurance Law For Women

In 2012, women will gain more protection whether they choose to get coverage through employer-provided health insurance plans or buy an individual healthcare plan. Brown signed three bills into law in order to provide maternity services for pregnant women and new mothers. According to Brown, this is will give children the “best possible start.”

Another date women should watch for in the next year will be on the 1st of July. SB 222 requires individual California health insurance plans to provide maternity services. Also beginning July 1, AB 210 will provide maternity services to group health care plans. Employers will be required to pay for coverage under group health plans for women on maternity leave under SB 29.

Are Small Businesses Affected Too?

According to the chief executive of the advocacy group Small Business Majority, small business firms with employees less than 50 will find that healthcare coverage is more affordable under the new laws in California. That is very significant because approximately 718,220 small employers in California make up 99.2 percent of California’s employers in 2006, as stated by the U.S. Dept. of Commerce: Bureau of the Census.

Whether Californians get coverage through their employer or buy individual policies, they could be eligible for “rebates” next year. To comply with federal reform, SB 51 requires insurance companies to spend at least 80 percent of premiums from individuals and small firms on health care for members. As for group policies, 85 percent of premiums must be spent on members’ health care.

Blue Shield Of California Will Distribute Rebates To Consumers

Just this summer, Blue Shield of California announced that it would cap its net earning at two percent of revenue and return the excess to their policy holders in the form of rebates. With more than three million California insurance plan holders, Blue Shield posted a profit margin of 3.1 percent last year. This included income derived from investments. According to a press release from Blue Shield, individual consumer credits range from $25 to $415. Businesses should receive approximately $110 to $130 per worker.

Subsidies For California Health Insurance Made Easier

Gov. Jerry Brown also signed bills that will make it easier for Californians to apply for subsidized California health coverage via the online state health insurance exchange. However, we have to wait until 2014 when it will be fully implemented. Under AB 1296, the forms and procedures needed to get subsidies through the state based exchanged are tackled.

Maternity Coverage in Health Insurance

Maternity benefits used to be automatically included with every new policy issued. If you get benefits from an employer, maternity benefits are still going to be automatically covered. However the individual and family market has changed over the last ten years to better serve the market place. Now many individual and family medical insurance plans do not include maternity benefits at all. You will not be able to get those benefits at all with most plans. If you do want maternity coverage there may be some few plans available that will offer an option for coverage at an extra cost.

The problem is in the expense for the benefit. This benefit is only important for women of child-bearing age. When the benefit was included automatically on everyone’s policy, the costs were also included in everyone’s premium whether or not they needed the benefit. The few plans that started offering maternity benefits as an option rider to a medical insurance plan cost much less for people who did not want the extra coverage that they did not need. As a result, everyone bought the plans without the benefits to save money each month. That caused the plans with automatic coverage to go out of business. By the time the other plans came back into the market they stopped offering the maternity benefit altogether and the cost was much lower.

Even without the benefits for pre natal and giving birth, any complications for the mother will be covered under the regular insurance plan. The only thing that will not be covered is the regular delivery costs and pre natal care like ultra sonic imaging. It is not as though the expecting mother will not have coverage during her pregnancy. If she gets injured or sick during the pregnancy, she will get all those expenses covered just like she always would.

Another thing people need to be aware of concerning getting coverage once you are pregnant is that typically you will be declined new coverage once you are already pregnant. Coverage will be available as soon as the child is delivered, but neither the expectant husband or wife will be eligible for new coverage until after the baby is born. This does not mean that you are sick, it is just a rule that most all insurance companies follow.

Most of the information provided here is for the individual and family market. If you or your spouse has a job that provides benefits, maternity will be covered even if you are already pregnant when you get the new policy. Benefits for pregnancy are very important and you need to be aware of how the insurance plans cover the different situations. Call your local insurance agent to determine if there are solutions for you, or work with your physician to make payment plans that are affordable to you.

How to Find a Health Insurance Maternity Plan That Fits the Modern Mom

The century has turned, and thank goodness for that-our last one was a tumultuous one for birthing moms. The 1900s saw countless practices that spanned prenatal care, labor, delivery, and post-partum care that are now widely considered to be barbaric. We developed birth-defect producing drugs to alleviate morning sickness, strapped down and sedated women who were giving birth, banned fathers from delivery rooms. The 20th century approach to labor and delivery focused largely on the role of the doctor. Yet, in recent times, the focus is returning to the expecting woman.

As the focus shifts away from doctor-aided births and hospitalized labor, the need for a health insurance maternity plans that address new ways of thinking has arisen. Just as women throughout the world have been giving birth without the help of doctors since the beginning of humanity, so also are modern women returning to choosing different support professional for giving birth (most commonly, midwives and doulas) and even different establishments for giving birth (such as birthing centers or the choice to give birth at home).

So, are there health insurance maternity plans that address these emerging conditions? Will a woman who wants a midwife to deliver her baby stand a chance at finding an insurance company who will pay the costs? In this day and age, is it always cheaper to choose traditional hospital care, or are there some progressive companies that have listened to changes in women’s tastes?

Fortunately, many insurance companies are beginning to come around and offer health insurance maternity options that stray from the 20th century mold. The best way to find such plans is to take advantage of modern online rate quote search tools, which can collect data robust enough to determine whether flexibility in maternity care options is a priority for you.