The Financial Aspects of pregnancy
So the home pregnancy test is positive. What’s next? Aside from avoiding alcohol and tobacco, you should probably reach out to an ObGyn’s office to establish care. As someone who just went through this personally—and as an ObGyn myself—I thought I’d put together a primer on the finances of pregnancy and the postpartum period. (This ignores the obvious financial adventures of raising a child. Expect a post on that in about 18 years.)
First off, you need to obtain health insurance. If you don’t have health insurance through your employer or don’t think you can afford it, every state offers a Medicaid option for pregnant women. In addition to health insurance, some employers offer hospital indemnity insurance. Hospital indemnity insurance typically covers any inpatient costs not covered by your regular health insurance plan. Why is this important? Well, hospital stays are not cheap. Most women who undergo a vaginal birth will stay two nights following the delivery. After a cesarean delivery, a patient might be admitted for two to four nights. And if you are admitted for any period of time prior to your delivery (i.e. induction of labor, prenatal complications, etc.), you may be looking at anywhere from three to six nights in the hospital. The charges can quickly add up!
Once you have obtained health insurance, you need to find an obstetrician. This is the term for a physician who delivers babies. In some rural communities, this service may be offered by a family practitioner. In other cases, you may opt to obtain your prenatal care from a certified nurse midwife. In any case, it is in your best interest to establish care in the first eight to ten weeks after your last menstrual period.
When seeking out a physician or nurse midwife, you should make sure that they are considered “in network” with your insurance. If you choose to go with a physician or midwife who is “out of network”, you may be required to pay much more for your prenatal care. Many insurance plans have tiers, or levels. The top tier typically includes those physicians and midwives that have the most favorable contract with the insurance company. Put simply, you want to find a physician or midwife in the best tier your insurance plan has to offer.
At the same time, you need to decide where you plan to deliver. In most cases, this will be a hospital. (Low-risk deliveries are sometimes performed by a certified midwife at birthing centers. Home births should not be attempted, no matter what.) Just as you vetted the obstetrician or nurse midwife, you need to make sure that your desired hospital is considered to be “in network” with your insurance company. Some obstetricians deliver at multiple hospitals, and some of them might be “out of network” for you. Thus, asking this question up front is very important.
(A side note on choosing your physician and hospital: emergencies can and do occur in pregnancy. If you call an ambulance and the driver is tasked with getting you and the baby to the nearest labor and delivery unit, they may not choose to drive the 90 miles to the hospital you chose months before. If there’s a closer one to be found, that’s probably where you’ll end up. And at that point, insurance tiers go out the window.)
Once you’ve found an “in network” physician and hospital, you should know that not all pregnancies are equally expensive. A low-risk, uncomplicated pregnancy that ends in a vaginal birth may look much different on a billing sheet compared to a pregnancy complicated by type I diabetes, preterm labor, and a cesarean delivery. Some of these things are within your control, and some aren’t. In my practice, I’ve encountered two items that are often in your control.
The first is genetic testing, specifically the relatively new technology that allows us to determine the fetal gender as early as ten weeks gestation. Of all prenatal care charges, this is the one that patients complain about the most. In the distant past, an expectant mother and father didn’t know the gender of the baby until delivery. Then ultrasound came along and we often revealed the gender at the anatomy scan (~20 weeks gestation). More recently, “cell-free DNA” technology has allowed us to determine the fetal gender by a simple blood test from the mom-to-be. While knowing the fetal gender so early is quite appealing, this new blood test was not developed solely for this purpose. Cell-free DNA technology allows us to screen for genetic abnormalities (i.e. Down syndrome) much earlier than we were previously capable. Examples include the MaterniT21 from Integrated Genetics, the Panorama from Natera, and the Innatal from Progenity. As this method is relatively new and there are other (cheaper) ways to screen for genetic abnormalities, not all insurance carriers will cover it. For this reason, it is imperative to ask your insurance company what your out-of-pocket cost would be if you obtained this test. Even though some high-risk patients (those 35 years of age or older, for example) may have no co-pay at all, I’ve heard horror stories of laboratory charges as high as $5,000+. If your pregnancy is low risk and your only motivation in obtaining the test is to find out the fetal gender, it may benefit you financially to simply find out the gender at the anatomy ultrasound. As I mentioned before, there are other ways to screen for chromosomal abnormalities that have been around much longer than cell-free DNA and usually have a lower price tag (the quad screen, for example).
The second point of contention is prenatal imaging. In a routine, low-risk pregnancy, insurance companies typically cover two ultrasounds: the viability scan (typically done in the first trimester, this ultrasound helps to confirm your due date, among other things) and the anatomy scan (done around 20 weeks, this ultrasound allows the physician to evaluate the fetal anatomy, placenta, cervix, etc.). There are reasons to obtain other ultrasounds, especially in the third trimester. Diabetes, high blood pressure, vaginal bleeding—those are all valid reasons. However, as long as the patient’s uterus is growing appropriately and the pregnancy remains complication-free, there’s no clinical reason to obtain additional scans. Patients request them all the time, and I understand why: there’s nothing cuter than pinning those ultrasound photos to the fridge or compiling them in a scrapbook. Just keep in mind that the insurance company may leave you on the hook for the cost of that ultrasound if there isn’t a valid medical reason for it. (If your pregnancy is uncomplicated and you simply must have that coveted 3D image of your baby’s face, there are third party ultrasound businesses that offer fetal imaging options. Keep in mind that these are not covered by insurance and the images are not reviewed by a physician.)
Once the baby is born, there are a few things to keep in mind. As I mentioned before, women typically stay two nights in the hospital following a vaginal birth and two to four nights after a cesarean delivery. If you and the baby are doing well and discharge from the hospital is offered to you, take it! The hospital is a fantastic place to recover, but your own home is often much better. (Plus, you have to consider that the longer you’re in the hospital, the more likely you are to be exposed to something that could make you or the baby sick.) From a financial point of view, fewer nights is almost always a win. Consider two women who both undergo cesarean delivery. If one of them meets her discharge goals and goes home after two nights, her hospital bill is going to be drastically different than the patient who stays the full four nights. Of course, every situation is different and occasionally those four nights are warranted.
The next thing on your financial to-do list is to submit the application for the newborn’s social security number. In our case, the hospital had us fill out the application before we were discharged and they got the ball rolling for us. If your hospital or birthing center doesn’t offer this perk, the instructions can be found online at https://www.ssa.gov/forms/ss-5.pdf. It typically takes four to eight weeks to obtain the infant’s social security card.
In the meantime, you’ll need to add your newborn to your health insurance plan. Our insurance provider required us to do so in the first 30 days after delivery. The process was fairly simple. I filled out an online questionnaire and scanned in the baby’s hospital-provided birth certificate. Approval was granted the following day. Contact your insurance company in order to do this.
The two following topics are optional, and can only be completed once you have the infant’s social security number in hand.
You are now responsible for another human life. At the minimum, it is probably a good idea to add your infant as a beneficiary to your life insurance plan(s). Since your newborn is considered a minor, you will need to appoint a guardian or set up a trust in order to complete this step. And if you feel as though your current life insurance plan is inadequate given the recent addition to your family, it may also make sense to apply for additional coverage.
Start a 529 fund for your newborn. A 529 account is an excellent way to save for education expenses down the road. You fund it using after-tax money (so no federal tax deduction), but the money grows tax-free and can be withdrawn tax-free as long as you are using it for educational expenses (this now includes private primary and secondary education, FYI). Some states offer an income tax deduction based on your contributions, so it is best to research the plans thoroughly before choosing one.
Summary: obtain health insurance, find an obstetrician and hospital that are "in network", be wary of prenatal costs associated with genetic testing and ultrasounds, cherish your newborn, apply for the infant's social security card, add the newborn to your health insurance plan and as beneficiary on your life insurance plan, start a 529 fund, enjoy the next 18 years
Comments? Suggestions? E-mail us at email@example.com!