Maternity Insurance

Most states do not have individual/family plans that cover the cost of maternity except for very limited coverage called "complications". Only a few make it mandatory in all coverage.

One basic issue to decide is whether you are looking for economical financial protection against an unexpected high maternity expense above the normal, or you are looking for a subsidy where someone else pays part, or most, of the normal cost of your expected pregnancy. Insurance is designed to cover unwanted, undesirable events, but maternity is usually a desirable event. It is often a planned event. Insurance was not invented to save people money on expected expenses or on hoped-for, happy events. So insurance coverage for maternity exists only under limited conditions.

Subsidies are provided by taxpayer-funded government programs or government mandates that compel all health insurance plans to also pay for maternity expenses. Some states have state-sponsored health insurance programs that include maternity, so you would have to contact your state and local government to see if there is such a program and whether or not you qualify.

There may be a waiting period for pre-existing conditions with a cumulative month's credit for each month that you were on prior insurance, whether or not it covererd maternity. So if you are pregnant already, there may be little coverage time left if you do not have prior insurance.

In most every state, all group health insurance (bought by employers for employees) must cover the cost of maternity subject to the terms of the plan e.g. deductible, coinsurance % after deductible, and copays, as applicable. Only in a few states must individual plans cover maternity. If there is no law mandating maternity coverage for individual plans, and you are unable to be covered by an employer plan, the best idea may be to contact doctors whose practice includes pregnancy and delivery and see what is the best fixed price you can get for the entire maternity, no matter what difficulties or complications may arise.

It is easily discovered if your state mandates maternity coverage by getting quotes on individual health insurance and see if maternity is included in the plan descriptions. If any plan does not cover maternity, then your state does not mandate maternity coverage for individual plans.

In most states, if you are pregnant already, no individual health insurance company will issue an individual policy to you until the maternity is over, even if the plan does not cover maternity. They will also not insure the father until the pregnancy ends. The parent has the right to add the newborn to the policy without regard to health status, so there is a pre-existing financial risk which insurers will not accept with a new application for insurance.

If you cannot get employer coverage that covers maternity, and you do not qualify for a state program, and your state does not mandate that all health insurance cover maternity, there may still be some insurance options left, but they are not subsidies.

Depending on your state, individual insurance may have some options. Some companies have a rider that pays for the normal costs of maternity, but has an upper limit like $2,000 or $4,000. There may also be waiting periods, e.g., conception must occur after 90 days from the effective date, and the rider must be elected in the application for the policy.

In most states, the only mandated maternity coverage for individual plans is for complications of pregnancy. It is typically included in the coverage at no extra charge. Complications of maternity generally means any disease which you could get if you were not pregnant, but which happens because you are pregnant. Difficulties of pregnancy like morning sickness which occurs only in a pregnancy and not otherwise, is not a complication, it's a difficulty and is not covered in most plans.

Although the cost of a normal maternity may be about $4,000 or $5,000, some maternities cost $20,000, or $30,000, or more. This high expense can be caused by difficulties, not complications. So it is an important consideration whether to pay for a rider that has a relatively low upper limit like $4,000 or buy insurance that has a rider with no upper limit on maternity expenses except the policy maximum of $2 million to $8 million, as selected and state available.

When you see quotes that include maternity riders, you will see that the most economical way to handle the issue is to use insurance as insurance. That is, you are prepared to pay the expected normal cost yourself, and you pay a relatively small amount extra for a rider that pays for any unexpected expense above the normal. For example, if you choose a $5,000 maternity deductible, i.e., you pay the first $5,000 of maternity expense, and insurance pays everything above that, then you have excellent financial protection against an unexpected high expense and you pay a much lower premium than if you choose a $1,000 deductible. In most states, the maternity deductible is separate from the policy deductible.

If you pick a rider that pays $4,000 towards the expected normal cost of pregnancy, you have no financial protection above $4,000 if the pregnancy is unexpectedly difficult and costs $20,000. The cost of such a rider may not be much better than just saving that amount each month yourself in your own bank account and pay the $4,000 out of the money that you have saved. In fact, for some people, paying for such a rider is worse.

Most individual coverage in most states does not include maternity coverage. The best maternity coverage is usually in employer group plans and is provided and financed as an employee benefit. There is usually not much maternity coverage for individual/family plans unless state law places the burden on all individual health insurers.

Insurance Itself

The reason that there is not much maternity coverage in individual plans, unless a state law mandates that all individual/family plans cover maternity, is because a pregnancy is often a desired, planned event, not a financially catastrophic, unexpected event. Consequently, with generous maternity benefits in an individual/family plan, many applicants would buy a plan with maternity coverage so as to save money on the maternity costs, then drop the plan when the pregnancy is over.

The result would be that the insurer operates at a loss for those plans unless it charges a much higher than average premium, which would result in its plans not being competitively priced, leading to a shrinking amount of insurance business, and that sort of operating mode can lead to complete business failure.

Insurance companies do not have the power to levy taxes and therefore are not able to act as social welfare agencies. Insurers cannot stay in business if they are set up to lose money. They must collect more in premiums than they pay in claims or they go out of business.

The basic reason for insurance to even exist is to protect against unusual, unexpected, unavoidable, financially catastrophic events. The big claims are financed by small regular premium payments from insureds who mostly never have any large claims.

The federal health reform law (PPACA aka ObamaCare) does not mandate maternity coverage. So even though it mandates that no one can be turned down as of January 1, 2014, that does not mean that maternity is covered unless the state in which you live mandates it.

The terms of any insurance or maternity rider is not determined by anything on this website but is determined by the issued policy. The description and information given here may not be accurate for any particular plan and may not be up to date or complete.