A few months back, before Milly arrived, I wrote a post on making effective insurance choices when you find out that you and/or your spouse are expecting.  That post was especially for people who buy their own insurance.

I wanted to give a little update to that post about what I’ve learned since we had Milly.  Fair warning, this post may get a little bit “down into the weeds” of insurance, claims, benefits, and care, but it will be especially helpful if you purchase insurance on your own and are now facing the prospect of having a baby.

As you may recall from the first post, you can purchase any kind of insurance you want at open enrollment periods, even if you just found out that you’re expecting.  When looking at best estimates of what delivery care would cost, we made the decision to go with the “Platinum” plan for Nancy, since it would mean less out-of-pocket overall.  That estimation of cost came from the best info I could gain from the hospital combined with what our plan outlines as our deductible and out-of-pocket maximum.

You can’t make changes or enroll in a new health plan except for during open enrollment or due to a “qualifying life event,” such as a birth, adoption, job loss or change, and a few other scenarios.

In the last post, my theory was that we’d switch back to the low-premium, high-deductible health plan once we had the baby, as you have 60 days from the child’s birth to change your health coverage.   That’s actually not the best plan, as I’ve found.  In fact, what I discovered in further conversations is that the changes you make to your coverage are retroactive to the date of the “qualifying event,” i.e. the baby’s birth.

Stick with me here.  The new policy is retroactive in the sense that claims that happen on that date will be processed under the new plan that you choose.  Let’s look at a (pretty close to) real life example:

Let’s say the hospital bills $10,000 for the birth/delivery services and mom’s stay (not unusual).  Your share of that $10,000 will be different under different plans.  If the date of service on that $10,000 is the same as the new coverage date (the child’s birth day), the $10,000 will be processed thought insurance according to the plan that you choose after the child is born, not the plan you’ve had during pregnancy.

How it works for us is this: If we moved Nancy back to a lower-premium, high-deductible plan right now, we’d likely be responsible for a much larger portion of it – all of it, in fact, as the high deductible on my plan is $11,000.  Making no changes to Nancy’s health plan still costs more than I had hoped to pay, but it’s still much cheaper than paying the $10,000 ourselves.

In theory, (though I haven’t played this scenario out with an insurance rep) we could have kept her on the cheaper health plan, then switched to the more expensive one in the 60-day qualifying event window.  I would talk that through with a rep from your insurance company before trying it out; wouldn’t want you to get blindsided.

The bottom line is this: If you’re considering getting pregnant or are pregnant, take some time to make a good choice about your insurance coverage the next time you have a chance to change your plan.  Just for fun, because no one can predict it, an ideal scenario would look like this:  Get pregnant early in the year, having switched to a platinum-type plan in the open enrollment period that immediately preceded that year.  You pay one year of higher premiums, then return to your original plan.  Not that you can control that though.

I’m working on a post about how we chose what plan we put Milly on, so stay tuned for that!

Question: What do you think about all this?  Did anyone actually finish reading?  What are your thoughts?