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Pregnancy complications: What’s covered by health insurance and what’s not?

Having a baby can break the bank even when the pregnancy goes smoothly, but complications can lead to even bigger medical bills and lost income from missing work. So, it’s smart to make sure you have full health insurance coverage before that pregnancy test comes up positive.

Many types of pregnancy complications can crop up, ranging from problems that cause mild discomfort to serious medical issues that could require months of bed rest or even hospitalization. These conditions typically are covered by group health insurance obtained through work. However, individual health insurance plans purchased on the open market often do not cover normal pregnancy costs, but they may cover complications.

One complication, extreme morning sickness – or hyperemesis gravidarum – received international attention when it struck the British royal family. In early December 2012, Kate Middleton, the wife of Prince William, was hospitalized with the condition. Hyperemesis gravidarum causes severe vomiting that can lead to dehydration and weight loss; it affects up to 2 percent of pregnancies.

health_insurance-pregnancy-complicationsBut there are many more common pregnancy complications that also strike women every day, according to the American Pregnancy Association. These include gestational diabetes, when a woman fails to produce enough insulin during pregnancy, as well as preterm labor, when a woman is in danger of delivering her baby too early. Other potential complications include infections, fetal development problems and miscarriage.

Insurance and pregnancy

Health insurance can help defray medical bills, while disability insurance can replace some lost income if you can’t work. Here’s what you should know about insurance and pregnancy:

Health insurance

• Group health insurance from work. If you have group health insurance from a midsize or large employer, your plan should include maternity coverage. The federal Pregnancy Discrimination Act requires that health insurance from an employer with at least 15 workers must cover pregnancy like any other medical condition.
• Individual health insurance. If you have individual health insurance that you bought on your own, it might not include maternity coverage. However, some plans that do not offer maternity coverage do cover complications of pregnancy, according to Alex Forrest, vice president of AC Forrest Insurance Group, an insurance agency that specializes in health insurance. Coverage for complications varies by plan.

• Group health insurance from work. If you have group health insurance from a midsize or large employer, your plan should include maternity coverage. The federal Pregnancy Discrimination Act requires that health insurance from an employer with at least 15 workers must cover pregnancy like any other medical condition.

• Individual health insurance. If you have individual health insurance that you bought on your own, it might not include maternity coverage. However, some plans that do not offer maternity coverage do cover complications of pregnancy, according to Alex Forrest, vice president of AC Forrest Insurance Group, an insurance agency that specializes in health insurance. Coverage for complications varies by plan.

Beginning in 2014, the federal Patient Protection and Affordable Care Act will require all individual and small business group plans to provide maternity coverage.

Disability insurance

• If you are employed, you might already have short-term disability insurance through your job. Policies that cover normal pregnancies typically pay a percentage of your salary for a set period of time – or longer if there are complications. A normal pregnancy is a covered illness for many, but not all, short-term disability policies, according to Kevin Haney, president of A.S.K. Benefit Solutions, an insurance agency that specializes in coverage for infertility, pregnancy and maternity. Pregnancy complications that make a woman unable to work for a period of time – for example, if her doctor orders bed rest – typically are covered by short-term disability policies.

• Five states – California, New York, New Jersey, Rhode Island and Hawaii – require employers to offer short-term disability insurance. In California, the state-run short-term disability coverage pays about 55 percent of the mother’s salary for four weeks before birth and six weeks afterward, with more time for a Cesarean section birth or medical complications.

• It is not possible to buy a short-term disability policy that covers normal pregnancy without going through your employer, says Haney, whose company helps employees get voluntary benefits through work. However, you can buy a policy on your own that will cover complications of pregnancy, he says. But most women want a policy that covers normal pregnancy, he says, because it offers a guaranteed paid maternity leave. Also, policyholders typically pay less in premiums during pregnancy than they receive from the company during their period of disability. For example, a woman who makes $54,000 might pay $1,500 in premiums over 10 months and then get a check for $3,500 to cover six weeks off from work after delivery.

Getting ready for baby

Before you start picking out names or decorating the nursery, follow these five steps to make sure you’re properly covered.

1. Are you covered and, if not, can you get coverage? Check to see whether maternity coverage, which covers costs of pregnancy and delivery, is offered under your health insurance plan and, if not, whether you can add a rider – an addition to your policy to cover pregnancy and delivery. If it is covered, ask how long you’ll need to wait to get pregnant to be covered. “Some insurance companies have a waiting period – ‘Yes, we’ll add your maternity coverage, but you can’t get pregnant for a year’ or some other magical number,” says Brad Imler, president of the American Pregnancy Association.

2. Open an HSA. If you’re shopping for health insurance coverage, sign up for a plan that lets you open a health savings account (HSA), Forrest says. However, a health savings account is limited to high-deductible plans, defined by the IRS as having an annual deductible of at least $1,200 for an individual or $2,400 for a family. “You can start stashing money away right away,” he says. You won’t have to pay federal income tax on the money you put in the account and use for medical expenses.

3. Get disability insurance early. Make sure you have short-term disability insurance at least three months before getting pregnant, Haney recommends. Many policies have a nine-month exclusion for normal delivery, meaning that a woman who obtains the policy right before she gets pregnant, then delivers before her scheduled due date, likely wouldn’t be covered. However, complications that happen at any time during the pregnancy would be covered, he says.

4. Left it too late? If you’re already pregnant and don’t have health insurance with maternity coverage, you might have to pay for prenatal care and delivery on your own, Forrest says. In that case, he recommends shopping for a doctor and hospital willing to charge you the same price it charges a major insurer. It’s important to get any special pricing agreements in writing, Forrest says.

5. Don’t delay prenatal care. This care can help catch complications early – complications that could be costly later on. More than half of the 13 percent of pregnant women who are uninsured don’t start prenatal care until their second trimester or later, according to Imler.

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