The Best Insurance Plan for Pregnancy Expenses

Medical debt among new mothers in the United States is skyrocketing. Learn how to find the best insurance plan for pregnancy expenses.

Best Insurance Plan for Pregnancy Expenses

The costs associated with pregnancy and childbirth are substantial, even for those with insurance. On average, childbirth leads to nearly $3,000 in additional out-of-pocket spending for new mothers enrolled in large group plans, a burden that many find challenging to bear.

For those who don’t have access to a low-deductible employer-sponsored plan, the costs can be as much as five times higher, and more –– even with insurance. And many young women and families are having trouble coming up with the cash.

According to KFF, new mothers are nearly twice as likely to be carrying medical debt compared to young women who have not recently given birth: 14.3% of new mothers have medical debt over $250, compared to 7.6% of women who did not give birth recently.

Why? A big part of the reason is that health insurance plans still have high deductibles and coinsurance burdens for policy holders. While Medicaid covers about 40% of births with minimal cost-sharing, for low-income households, roughly half of births are covered under private insurance, which often includes significant cost-sharing. That means that young families and single mothers must pay substantial amounts out of pocket in the form of deductibles, copays, and coinsurance.

And unfortunately, traditional insurance policies with high premiums and deductibles further exacerbate this issue, leading to financial vulnerability and long-term debt for these individuals.

About 12% of people who are struggling with medical debt attribute at least some of it to maternity and childbirth-related expenses.

These economic challenges, of course, have significant spillover effects onto children as well as their siblings, as their parents struggle to make ends meet in the face of high medical care costs, medical debt payments, and recent Biden-Harris inflation rates.

How Much Does Childbirth Cost, On Average?

Childbirth costs can be daunting, both with and without insurance.

In total, pregnancy, childbirth, and postpartum care average a total of $18,865 per pregnancy, without insurance. With insurance, a vaginal birth typically costs between $5,000 to $11,000 out-of-pocket, while a cesarean section ranges from $7,500 to $14,500, according to KFF data.

Without insurance, these costs can soar to $10,000 to $15,000 for a vaginal birth and $15,000 to $30,000 for a cesarean section. Essentially, without insurance, young families can easily emerge from the maternity unit with the equivalent of a car note… on top of another mouth to feed.

Costs for Childbirth and Neonatal Costs

The costs associated with newborn care can quickly add up.

Routine care, such as well-baby visits and vaccinations, should be covered by your plan or health sharing program. However, it’s crucial to be prepared for potential complications.

In 2023, the costs for neonatal care, including stays in Neonatal Intensive Care Units (NICUs), can be extremely high. For families with an Affordable Care Act (ACA)-qualified health insurance plan, the out-of-pocket costs for NICU care can still be significant, routinely reaching the out-of-pocket maximum for ACA-qualified (“Obamacare”) plans, which is $9,450 for individual policies and $18,900 for family plans as of 2024.

This maximum applies to in-network care and includes deductibles, copayments, and coinsurance.

If you wind up needing care from providers outside your network, costs can be even higher.

Without insurance, on the other hand, the cost of needing can be staggering. A single day in the NICU can range from $3,000 to $5,000, depending on the level of care required. For a month-long stay, this can add up to $90,000 to $150,000, not including additional costs for surgeries, medications, or specialized treatments. These expenses can create a severe financial strain on families, emphasizing the importance of comprehensive insurance coverage and financial planning to manage these potential costs.

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Saving Money and Avoiding Debt

To manage costs, it’s essential to implement both basic and advanced strategies to save money and avoid medical debt.

First, choosing in-network providers can help avoid out-of-network charges, which can be significantly higher. Negotiating medical bills is another effective strategy; hospitals and doctors often offer discounts for upfront payments or in cases of financial hardship. Additionally, opting for generic medications can substantially reduce prescription costs.

For more advanced strategies, consider Obamacare-qualified policies and subsidies available under the Affordable Care Act (ACA). These subsidies, based on income, can significantly reduce premium costs, making healthcare more affordable.

Consider a “Silver” Plan

If your income is less than 200% of the Federal Poverty Line, you should consider choosing a “Silver” plan under the Affordable Care Act.

Why Silver? Because in addition to the standard income-related premium subsidies that all ACA-qualified health insurance plans receive, Silver-tier plans, and only Silver-tier plans, also qualify for cost-sharing reductions that can significantly reduce your out-of-pocket costs.

For example, if you’re single with no children, and your income falls below $36,450 for the year, then instead of facing medical bills of up to $9,450 out of pocket, the most you’ll have to pay is $7,550. If your income fell between $14,580 ad $29,160 last year, then the most you’ll incur out-of-pocket is $3,150, with the Silver tier cost sharing reductions.

If you chose a Bronze plan to save on premiums, or a Gold or Platinum plan, you would potentially face much higher costs, in the form of deductibles, copays, and coinsurance – whether for pregnancy and childbirth-related costs or anything else.

Silver-Tier Max Out-of-Pocket Costs for Individual Plans

If your household consists of four people, then the Federal Poverty Line is higher compared to that of a single individual. If you are married with two children, or single with three children, you can qualify for a cost sharing reduction benefit with nearly twice the income: Up to $75,000, as of 2024.

Silver-Tier Max Out-of-Pocket Costs for a Family of Four

Take Advantage of Health Savings Accounts (HSAs)

Health Savings Accounts (HSAs) are another valuable tool, allowing you to save pre-tax dollars for medical expenses. These funds can be used to cover a wide range of healthcare costs, including deductibles and copays, providing a significant financial buffer.

Not everyone is eligible to contribute to an HSA. To qualify to make contributions, you must be enrolled in a qualified High-Deductible Health Plan (HDHP). Your employer may or may not offer one as part of your group plan. If you are buying insurance through the individual health insurance market, however, our Personal Benefits Managers can help you identify or enroll in an HSA-eligible plan that meets your needs.

Learn More: How Much Can an HSA Save in Taxes?

Health Sharing Alternatives

Health sharing programs are an increasingly popular alternative to traditional insurance.

Health sharing plans aren’t insurance policies. Instead, these are independent, voluntary groups of people who choose to band together to help each other shoulder their medical expenses. Often, but not always, these groups are based on shared religious values. But many health sharing plans on the market are completely secular.

Health sharing plans don’t qualify for the ACA health insurance subsidies. But for those who make too much to qualify for a subsidy, anyway, monthly costs are typically just a fraction of that of an unsubsidized Obamacare-style plan.

Learn More: How Much Can Health Sharing Save?

These make health sharing plans very popular among higher-income households, especially if there are no pre-existing conditions to worry about. Health sharing plans typically don’t share costs related to pre-existing conditions right away, but impose a waiting period, which can last for several years.

However, for those who don’t qualify for a subsidy, and don’t have any conditions that require a waiting period, health sharing can be an excellent cost-saving solution.

Maternity benefits vary substantially among health sharing plans. Different plans have different cost sharing requirements and maximum sharing benefits, so if you are planning on adding to your family soon, or if there’s a chance you’ll become pregnant, it’s important to look carefully at the maternity sharing benefits of your specific plan before enrolling.

For example, some plans require you to be a sharing member for at least a year prior to the expected delivery date.

Health Sharing Plans and Your Marital Status

Unlike traditional health insurance plans, many health sharing plans will normally only share maternity and childbearing costs for married women, provided the husband is also enrolled in the plan.

Learn More: How Maternity Benefits Work With Different Health Share

The Best Insurance Plan for Pregnancy

What’s the best insurance plan for pregnancy and childbirth costs?

There’s no single answer. It depends on your individual, unique circumstances, including your income, size of your household, location, medical history, and sometimes even your marital status.

For some people, it’s a traditional ACA-qualified plan, and possibly an HDHP with an HSA for additional tax savings.

For others, it’s a low-cost health sharing plan.

Compare Pricing on the Best HealthShare Plans Available

Work With an Expert To Find the Best Insurance Plan for Pregnancy Expenses

Signing up for the right health plan doesn’t have to be difficult, time consuming, or stressful.

In fact, it’s quite easy. All you need is a bit of help from an experienced HSA for America Personal Benefits Manager.

Everyone’s situation is a little different, and one size doesn’t fit all when it comes to health plans. That’s why we are careful to understand your personal medical situation and budget before making a recommendation.

For many women, the best solution is to sign up for a traditional health insurance plan, and take advantage of available subsidies under the Affordable Care Act, as well as the cost sharing reductions available with a Silver-tier plan.

If you’re very low income, you may be best served on Medicaid, at least for now. But as you get more established financially later in life, you may need to switch to another plan. As always, our expert Personal Benefits Managers are ready to help you make that transition, which may give you more choices when it comes to choosing your doctors and other providers.

Many people are best served by a health sharing plan – especially those in higher income brackets who don’t have pre-existing conditions. HSA for America is one of the few leading benefits brokers who can talk to you about all your options, whether it’s traditional health insurance, high deductible health plans and HSAs, or alternative affordable health sharing plans.

For free, expert assistance in helping you navigate our complex health insurance system, contact a Personal Benefits Manager today.

For Further Reading: The Best Health Sharing Plans for Maternity and Childbirth | Paying for Pregnancy and Childbirth When You Don’t Have Insurance