If you are pregnant or your partner is, chances are you’ve got a lot on your mind. Figuring everything out with your spouse comes with a lot to consider; including financial topics. Babies aren’t cheap, but if you are smart, they won’t break the bank. One very confusing topic is the actual process of paying to have a baby. Hopefully you’ve got insurance, but even with that, your actual out of pocket could vary wildly. Depending on what your partner has in terms of health coverage, it could make sense to switch insurances (if the timing is right) to save what you actually have to pay. Having had a baby recently and budgeting all the expenses, I’d love to share some of my experiences, and potentially educate you on what to expect!

How insurance works

I’ve covered this topic in more detail in another post, but to quickly sum it up – you’ve got: a deductible, copay, co-insurance. A deductible is the amount you have to pay before your insurance will pay anything. So, if you’ve got a $500 deductible, expect to pay $500 before insurance kicks in. Copays are small amounts you have to pay each time you consume healthcare, i.e. a $10 copay to visit your doctor, and isn’t affected by where you are with your deductible. Co-insurance comes into play after you’ve hit your deductible, and is the percentage the insurance company will pay. So, if you are hit with a $1,000 bill after hitting your deductible, and your co-insurance is 30%, your insurance will pay $700 and leave you with $300. All of this comes into play, until you hit your annual out-of-pocket max, at which point insurance will (should, as I don’t fully trust insurance companies) pay it all. 

One thing that a lot of people don’t understand is that assuming you’re in-network, i.e. your insurance company has a contract with the provider (you can always call and ask doctor’s office/hospital and they should be able to tell you), you won’t pay the ‘advertised rate’. So, when the hospital hands you a bill for $20,000 (what a delivery could cost), don’t freak out and know that they’ll send that to your insurance, who will then pay the contracted rate. It’s the contracted rate that insurance will then calculate your portion. 

Although this can vary WILDLY depending on where you deliver, expect your insurance’s contracted rate to be $6K-$8K for a vaginal delivery and $10K-$12K for a c-section, and then your portion comes into play.

How to figure out how your insurance works

Now that you understand how insurance in general works, you’re probably curious to figure out how yourinsurance works. Somewhere on your HR portal, there will be a plan summary for your health insurance plan. Dig that up and get to reading. Thankfully, most are in an easy to read and understand format, with examples. One example is typically “having a baby”. 

Read through your coverage and figure out what the copays will be, and what the co-insurance will be. A plan with a 70% co-insurance will cost you a lot more out-of-pocket compared to a 90% co-insurance plan. 

Here’s an example of what to look for:

Also keep reading for an example breakdown, which of course will vary based on where you deliver and if any complications come up, but good to know about what you can expect to pay.

I would recommend looking at both your plan and your partner/spouse’s plan. If one of you has wildly better coverage, it could be worth switching to their insurance. You can only switch insurances during open enrollment, which is typically November/December. It’s typically fine to switch coverage mid-pregnancy, unless your plan has a pre-existing condition exemption for pregnancy (most don’t but good to maybe call and double check). 

In our example, Mrs. Money was on her work’s insurance plan, as they pay all her premiums (monthly payment to have insurance). However, she had a 70% co-insurance with a higher deductible, and after comparing her plan to mine, mine would cost a lot less to have Baby Money Finance. So, even with me paying premiums for her on my plan, it would still be cheaper. We switched her to my plan in November (open enrollment) and had BMF in February. Mrs. Money’s open enrollment is randomly in April, and we switched her back in April. I do somewhat regret switching her, as we’ve had some post-pregnancy therapy and doctor visits that are costing us more vs keeping her on my plan. Oh well! 

What costs to expect

To have a baby, you’ll have potentially 4 bills: the bill from the OBGYN for their weekly office visits and their fee for the delivery, the bill from the hospital for using their facilities and the nursing care, the bill from any anesthesiologists, which I’ve heard those can be sneaky high and out-of-network (i.e. no contract with your insurance), so maybe call ahead of time and ask about anesthesiologists and their coverage, and the bill from your pediatrician, as they’ll probably come visit the baby once or twice. Phew! Make sense? One interesting fact which confuses people – often doctors aren’t employees of the hospital, they just have admitting privileges, which means the hospital lets them use their facilities. So you’re paying the doctor their fee and the hospital their fee. Thankfully the OBGYN will have a global period for the entire delivery, so all visits in the office before/after and the delivery will be bundled up into one big fee. Some extra ultrasounds may cost you though, as they did with us. 

It’s tough to even give you a ballpark estimate given your OBGYN, delivery hospital, and not knowing the details of the delivery, but I’d recommend reviewing the insurance plan documents for that pregnancy example. 

Don’t forget a HSA/FSA 

So, you can easily expect to pay $500-$2,000 (or more) to have a baby. Make sure you’re starting to save for this expense now, as some OBGYNs actually require a deposit. One strong recommendation is to leverage a HSA/FSA to save that money tax-free. HSAs roll over forever but a FSA typically only lets you roll over $500, so plan accordingly. But even with some tax-free money, it’s better than none!

Having a baby is such a wonderful blessing, but a lot of work to make it happen! Hopefully this gives you some good insight into how the money part of it will all work out!