08/24/2023
Learn all about how paying for homebirth works!
Buckle in for a bit of a long read, but we really think it's worthwhile.
Look, we aren’t trying to stir anything up, but what we would like to gently say is that just because something sounds great, doesn’t mean that there aren’t pros AND cons to every option. With more providers in the area looking at or accepting insurance for home birth services, we want to shed some light on the entire picture, not just the assumptions. What does it REALLY look like to use your traditional insurance?
💳INSURANCE💳
There are some great pros to using insurance! But while it seems like perhaps you’ll only have to pay your copays, you will want to check with your insurance provider about Out of Pockets, Deductibles, and the percentage of those services that they will cover. As a very loose example, let’s say that Sally Home Birther has Blue Cross Blue Shield, and she has a plan that includes:
💰$4,000 deductible
💰25% coinsurance
💰Out-of-pocket maximum of $5,000
A deductible is the amount of money you need to pay before your insurance begins to pay according to the terms of your policy. An out-of-pocket maximum refers to the cap, or limit, on the amount of money you have to pay for covered services per plan year before your insurance covers 100% of the cost of services.
This means:
💰You must pay $4,000 toward your medical costs before your plan begins to cover costs.
💰After you pay the $4,000 deductible, your plan covers 75% of the costs, and you pay the other 25%.
💰When you've paid $5,000 out of your pocket toward your medical costs, your plan covers 100% of your costs until your "plan year" renews. A plan is good for one year.
When the next plan year begins, your deductible and coinsurance reset. You are once again responsible for the $4,000 deductible and 25% coinsurance. This is relevant if you have a pregnancy that goes from, say 2023 to 2024. If Sally chooses a provider who charges $7,000 for delivery, she will end up being responsible for $4,750 to her provider, and likely additional amounts out of pocket toward her lab bills and ultrasounds. If her pregnancy carries from one year to the next, she may end up paying the full $5,000 for the first year and the full $5,000 for the second year depending on what she is billed for.
Also? THIS WON’T INCLUDE ANY CARE FOR THE BABY outside of the immediate post delivery care, and standard Well Child Visits. You may be charged additional fees for additional visits.
The big benefit to Insurance is that you don’t necessarily have to be ‘paid up’ by 36 weeks, which can be easier to families that don't have savings set aside or don't have the means to come up with several grand over a 10 month period. Your insurance is considered a promise of payment for the most part, and billing you additional amounts on top of that is something that should NOT be seen as usual, standard, and in certain cases - legal. Your pregnancy, birth, and postpartum care are considered one global charge.
💵CASH PAY💵
The pros and cons of cash pay are simpler because the transaction is simpler. An agreed upon amount for services is discussed at your consult and first visit, a standard payment plan is decided upon, the fee (ranging from $5-8000 in Central Iowa) is expected, and this covers all standard prenatal care, delivery, postpartum, and newborn care through 6 weeks postpartum. This does NOT include labs, ultrasounds, non-stress tests if they are needed, and a few other possibilities (like amniocentesis if indicated). These are items that can be run through your insurance if you have it, or a cash sharing plan if you have one. Otherwise, cash fee is expected, but paid directly to the lab or imaging service (for example, Iowa Radiology or LabCorp).
You can seek out reimbursement through your insurance, and several Midwives will help with this process to a certain extent, but it is seen as the responsibility of the client to work with their own insurance company. Reimbursement can be anywhere from a very small percentage to most or all. It varies widely by the insurance plan, type of provider you use, and other factors such as the timing of your delivery with your deductibles and out of pocket maximums. Speaking to your insurance company and getting an estimation of benefits and costs early in your pregnancy can help you determine the best route to take.
📌IN CLOSING📌
It’s just not as simple as it seems. It seems like using insurance may be easiest. But it’s not always going to work out the way you think. Many people often end up paying the same amount or more as the cash rate. The cash rate seems like it’s the most straightforward, but when you are going to get reimbursement through insurance, it’s not always cut and dry either, and you generally speaking must be able to have your midwife paid in full by 36 weeks of pregnancy.
Ultimately, we encourage people to focus on finding the provider that they connect with the most. Whose style matches yours, whose training and perspective you are comfortable with, who has access to services or specialities that you think you’ll use. This person is going to be present for the most important event of your life. Trust and connection are the most important factors. But we recognize that making it work financially runs a close second.
