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When Having a Baby Leaves Parents Mired in Medical Debt

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Medical Debt

As soon as my sister Melissa returned home from after giving birth to her son via cesarean section, the medical bills started pouring in. Even with her employer-provided health insurance, she was still on the hook for thousands of dollars. Like a growing share of American workers, her policy came with a hefty deductible. She had to pay $3,000 out of pocket before her insurance even kicked in. Once she hit her deductible, she was still on the hook for 20% of her remaining fees. When all was said and done, she owed $8,800.

When she was ready to have her second child two years later, Melissa thought she was ready. She planned for a C-section and braced herself for her first post-delivery hospital bill. But even using the same insurer, she was stuck with an even larger bill than her first delivery. Her total out-of-pocket costs after insurance: $12,700.

This time around, she requested an itemized bill. When she opened it, she found charges for everything from $80 for one dose of ibuprofen to $1,800 to cover an out-of-network nurse practitioner who assisted with the delivery.

“I could have brought my own ibuprofen to the hospital if I knew it was going to cost that much,” she said. “And I never even saw the out-of-network nurse who assisted with my delivery or gave my consent to use her.”

The financial blows kept coming. Melissa realized that her insurer had billed her differently this time. Rather than treating Melissa as an individual seeking care, they automatically added her daughter to the insurance plan and based their coverage off the plan’s much-higher family plan deductible. She knew the bill was incorrect and set out to challenge the charges.

“I spent a year fighting with them and writing them letters,” she said. “I spent every lunch break on the phone with them.”

When insurance isn’t enough

The cost of childbirth in the U.S. is notoriously difficult to predict. Prices can vary from state-to-state and even from hospital-to-hospital. A 2013 Truven Health Analytics report found that average total charges for women and newborns with employer-provided commercial health insurance was $32,093 for vaginal births and $51,125 for cesarean births.

The Affordable Care Act requires maternity care coverage for patients. But the new law does not state which services have to be covered. Individual states can decide what is actually covered and insurance plans tend to be vague about prices. Add that to the fact that deductibles and copays for employer-sponsored and individual plans have been increasing and you’ve got an expensive mess.

“It’s hardly a fair consumer market,” said Suzanne Delbanco, executive director of Catalyst for Payment Reform (CPR), a nonprofit corporation pushing for greater transparency in health care quality. “You would never go into a Best Buy and choose a TV without knowing the price first.”

In addition to the lack of transparency, Delbanco said that consumers often have to share a higher portion of the cost of medical services. Over a six-year period (2004-2010) the average out-of-pocket costs for vaginal and cesarean births nearly tripled, according to the Truven report.

Even if a family knows their policy by heart, some expenses are simply impossible to control in the middle of a delivery.

“One of the biggest pieces, which is not limited to pregnancy and delivery, is surprise medical bills when there are providers inside the hospital that are not in-network,” said Dania Palanker, a Senior Counsel for Health and Reproductive Rights at the National Women’s Law Center. This practice is called “balance billing” in industry speak.

My sister had no idea one of the nurses helping her was not covered by her insurance policy. Hospital staff don’t typically stop a woman mid-contraction to call the 800 number on the back of the insurance card. The consumer rarely finds out about the extra charges until they are at home and receive their bill in the mail.

Some states now have laws that protect consumers against some forms of balance billing and several others are currently working on passing such laws. Healthcare and women’s rights advocates agree that there is still work to be done.

Carol Sakala, director of childbirth connection programs at National Partnership for Women & Families, said the Affordable Care Act could have done more to protect women from exorbitant delivery costs. “Prenatal care is a plus. No cost preventive services is a plus,” Sakala said. “But we’re still not serving women during labor and delivery.

It took my sister one year to smooth out the errors on her hospital bill after her second delivery. Fortunately, she was not stuck with the $1800 bill for her out-of-network nurse. But she still owed a total of $10,000 in bills for both children. She negotiated a payment plan with the hospital’s billing department, paying $400 per month, but it would have taken three years for her to pay it off.

She decided to get rid of her debt and move on instead. Melissa negotiated a lump sum settlement — $7000 — and agreed to pay off her entire balance at once.

“[I wanted] to be done with it,” she said.

How you can avoid sticker shock

  1. Read your policy thoroughly. Do your best to be sure everyone working on your delivery is covered by your insurance plan. Review your policy carefully as well. Some insurance plans have a guarantee built into the contract so that even if an out-of-network nurse or doctor sneaks into the room, consumers won’t be stuck with the bill, Palanker said.
  2. Shop around if you can. If you and your doctors believe you might need a cesarean section, it is possible to find estimates of how much hospitals in your area charge for the procedure by going onto their website. Also, check your insurer’s policy. They may cover your C-section entirely.
  3. Don’t accept your bill if you think it’s wrong. Medical billing errors are increasingly common, with some advocacy groups estimating they are as high as 75 or 80 percent. If you receive a bill for services that you believe are not accurate, request an itemized bill. That way you know exactly what you are being charged for and you can contest any unwarranted charges.
  4. Don’t be afraid to negotiate. Regardless of what your bill says, negotiate. Some billing departments may be willing to settle your unpaid bill for a lower amount. Insurance companies negotiate costs with the hospital all the time. My sister saved $3,000 by negotiating her bill directly with the hospital.  “It’s worth it to negotiate costs,” Sakala said.

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