7 Family Planning Tips for Your Healthcare Finances

Category: Health Insurance Originally Posted: April 1, 2015 by Colleen McGuire Last modified: September 12, 2016

Family planning means financial planning, and financial planning includes healthcare. There’s a lot to consider, and first-time parents especially need a little help navigating this uncharted territory. Especially since the waters look a little ominous at first.

On average, it will cost a middle-class American family nearly a quarter of a million dollars to raise a child born in 2013 from birth to age 18. Projections for those born in 2014 jump to $304,480.[1] This does not include college tuition.

It can help to break things down. We’ve put together seven health insurance- and healthcare finance-related tips for when you’re expecting—and right after you’ve given birth.


Beef up your HSA

Your health savings account should put on some pregnancy weight. You may have had few medical expenses until now, but having a baby is about to change all that. HSAs are tax-free when you use funds on qualified medical expenses—something you and your growing family will surely accrue.

Your health savings account may not pay for diapers, but its funds can be used for qualified medical expenses, including pre- and post-natal care, breast pumps and supplies, fertility enhancement procedures, delivery and more.[2] Even with insurance. A five-state study found that after insurance, out-of-pocket costs were around $2,200 for vaginal births and $2,700 for cesarean births.[3] Your HSA funds can come in handy here.

Create an HSA nest egg for a little extra financial security. Max out your annual HSA contribution limit. These limits change annually. In 2016, the annual limitation for individuals with self-only coverage under a high-deductible health insurance plan is $3,350 and $6,750 for individuals with family coverage under a high-deductible health insurance plan.[4]

Concerned you’ll saved too much? It’s not likely. Any funds you don’t use will roll over to the next year; they are yours to keep forever.


Know to expect from your health plan when you’re expecting

When financially preparing for baby, we focus a lot on what we don’t have and need. But make sure to look at what you already have. We’re talking health insurance benefits. Knowing what pregnancy-related care your health insurance plan covers and at what percentage or amount can help you determine your out-of-pocket share and prevent unpleasant billing surprises.

In general, the healthcare reform law includes maternity coverage among its 10 essential health benefits. That means all Obamacare healthcare plans sold on and away from state-based exchanges and the federal marketplace include benefits for care before and after you give birth. Specific benefits vary by state and health plan.

Read over your health insurance benefits and contact your insurance company with questions. Also make sure you understand details such as provider networks and how your deductible works. If you’re unclear, just ask.


Get rich (richer health insurance, that is)

Are your health insurance benefits robust enough for your growing family? You may want to consider buying a new healthcare plan once your baby is born. Look at your deductible, coinsurance and copayment amounts. With new healthcare expenses in your future, it might make sense to shift from bronze to silver or silver to gold. Your premiums might increase, but out-of-pocket costs could be significantly lower—ultimately saving you money in the long-haul. Crunch the numbers and see what makes sense for you and your family.

If you are planning ahead for a pregnancy, plan ahead for a new healthcare plan. During the annual health insurance open-enrollment period, you may not be pregnant, but if you suspect it’s in the cards for the upcoming year, make it a factor when selecting coverage. While there is a movement to make pregnancy a qualifying event that makes you eligible for a special enrollment period, at this time it’s not. Having a baby is a qualifying event.

Note: Above, we mentioned your HSA. If you want to keep contributing to it, make sure you choose an HSA-qualified high-deductible health insurance plan. If you don’t select an HSA-qualified HDHP, you can keep withdrawing HSA funds for qualified medical expenses, you just can’t deposit more money into the account.


Don’t have health insurance? Add it to your family

Thanks to the Affordable Care Act, also known as Obamacare, pregnancy is no longer a preexisting condition. That means insurance companies can’t deny you health insurance coverage or charge you more because you are pregnant.

If you buy health insurance from a state-based or federal health insurance exchange, you may qualify for income-based financial subsidies to reduce your monthly premium. You can also find affordable health insurance in the private marketplace through websites such as HealthCare.com. If you are concerned you can’t afford health insurance, see if you are qualified for Medicaid or other programs in your state. You can enroll in Medicaid year-round.

Being uninsured is financially risky anytime, but you can face tens of thousands of dollars in medical bills just from giving birth. A recent five-state study found that without health insurance insurance, vaginal births were around $30,000 and cesarean births were around $50,000.[5]

Again, if you are looking for health insurance outside of the open enrollment period, you have to be eligible to enroll during the special enrollment period. In order to qualify, you must have a specific life event occur. Qualifying events may include a change in marital status (getting married or divorced), giving birth or adopting a child, moving to a new ZIP code, experiencing a change in employment or editing your annual income level for your subsidized healthcare plan.

Note: The special open enrollment period runs from now until October 31, 2015. The regular open enrollment period for 2015-2016 begins November 1, 2015, and ends January 31, 2016.


Learn the price of pregnancy and shop around

By now the “pregnancy/raising kids is expensive” message may be getting old—and stressful. Don’t let it get to you; empower yourself. You probably searched for the best deal you could find on a car, a mortgage and the last flight you took. Do the same for healthcare.

The cost of delivery can vary by tens of thousands of dollars. Researchers at the University of California at San Francisco found that in the state of California charges for a non-complicated vaginal delivery ranged from $3,296 to $37,277—a non-complicated cesarean section ranged from $8,312 to $70,908.[6] That’s crazy.

As you make decisions about where to give birth and what healthcare providers you’ll use, compare costs. Contact billing departments for estimates. Verify your health insurance benefits and where you are with your deductible. And make sure your health plan covers the hospital and healthcare providers you choose, as well as the care you will receive.


Insure your little one

Newborn care may be an essential health benefit, but your infant will soon need his or her own health insurance coverage. Having a baby is a qualifying life event, and you can add your new family member to your current health plan—or change health plans—within 60 days of his or her arrival. This can be done on your state-based or federal health insurance exchange, or in the private marketplace.


Send a birth announcement … to your exchange

Receiving a health insurance subsidy? Once you give birth, contact your state-based or federal health insurance exchange to notify them of a change in family size. This will probably impact your Obamacare tax credit and health insurance premium—likely, in a positive way; more family members tends to mean a larger subsidy and lower monthly payment.

There are, of course, many other financial considerations related to pregnancy. Expectant parents are often reminded to secure long- and short-term disability insurance and life insurance, as well as to be aware of employer policies, state and federal law around maternity leave.

If you have questions during the insurance selection proces free free to  consult with health insurance agents and brokers, financial advisers, and you or your partner’s RRHH council if available.

Ready to search for a new health insurance plan now? Visit HealthCare.com.

[1] NBC News. “Having a Kid? It’ll Now Cost You This Much to Raise the Child.” Aug. 18, 2014. http://www.nbcnews.com/business/personal-finance/having-kid-itll-now-cost-you-much-raise-child-n183056

[2] IRS Publication 502 http://www.irs.gov/uac/About-Publication-502

[3] Pratini, Napala. “How Much Does it Cost to Have a Baby?” NerdWallet. Feb. 5. 2014. http://www.nerdwallet.com/blog/health/2014/02/05/how-much-does-it-cost-to-have-a-baby/

[4] Internal Revenue Service. 26 CFR 601.602: Tax forms and instructions. https://www.irs.gov/pub/irs-drop/rp-15-30.pdf

[5] Pratini, Napala. “How Much Does it Cost to Have a Baby?” NerdWallet. Feb. 5. 2014. http://www.nerdwallet.com/blog/health/2014/02/05/how-much-does-it-cost-to-have-a-baby/

[6] Chen, Caroline. “Baby Birth Costs Vary 10-Fold in Hospitals, Study Finds.” BloombergBusiness. Jan. 15, 2014. http://www.bloomberg.com/news/articles/2014-01-16/baby-birth-costs-vary-10-fold-in-hospitals-study-finds