Caught Pregnant With No/Crappy Health Insurance?


Stork with babyThe Stork family were sitting down for supper and to discuss the day.  Mommy Stork asked Daddy what he did that day.  Daddy said, “I was making a young couple in Dallas very happy.”

Daddy Stork then asked Mommy Stork what she did.  She said, “I was making a young couple in Houston very happy.”

Mommy Stork then asked their teenage son what he did that day.  He said, “I scared the crap out of some college kids in Austin.”

Several times each year I am asked the same question by young couples.

QUESTION

Question“My wife and I just found out she is pregnant.  We have no (or crappy) health insurance.  Is there anything we can do?”

I was asked a variation on that question last week by an engaged couple.  Whether it is right or wrong is debatable.  The fact remains, insurance companies still operate under an older set of morals.   They make a distinction between engaged girls and married wives.  It seems there is still a reason for that marriage license.

Although it is not my place to stand in judgment of anyone else, as an insurance agent I must relay insurance facts.  Below is the answer I emailed him.

ANSWER

Tim Barnes & Raven“Each state treats maternity differently.  I will try to answer your question based on Texas law.  If you live in a state other than Texas, let me know and I will look at options for you.

First, congratulations on the engagement.

Second, although you have a right to be concerned, you do not have to worry about finances.  I know it is scary and serious but it is not something you have to worry about as long as you are making proper plans, and it sounds like you are.

I have worked with this situation a few times and there is generally an answer.

Here in Texas, most people with maternity coverage have it through their group health insurance.  There are a handful of smaller insurance companies that offer maternity riders.  They are few and far between.

Many companies used to offer maternity riders but no longer do.  Those that still do are very, very expensive and limited.

The new Patient’s Protection and Affordable Care Act, aka Obamacare has a couple of benefits that may help you.

Pregnant motherRE: THE MOTHER

Ideally, she will be covered by a group benefit plan.  After the two of you get married, you can add her on as a dependent to your plan at work.  If you do so within 30 days of your wedding, they should accept her even if she is currently pregnant.

If they do not and she still has a good relationship with her parents, if she is less than 26 years old, she should be able to stay on her parent’s group insurance if it has maternity coverage.

Newborn babyRE: THE BABY

As for the baby, the new law requires insurance companies to cover children up until age 19 regardless of their health.  Getting the child adequately insured should not be a problem.  Just be advised that most insurance companies will not insure a child unless they are accompanied on the application with an insurable parent.

In the past I had to use a High Risk Health Insurance Pool to insure children with birth defects but that is not necessary any more.

I hate being a buzz kill at such a joyous time but it is one of the drawbacks of my job.  I am often the guy that has to ask “What if…?”

Your biggest concerns are;

  1. What if the maternity costs are high?  -  Don’t worry, they will be.  Once you are married and you can add her to your group plan, your HSA is going to be wiped out this year.  My advice is to start funding that account as much as you can this year and early next year.  You will spend some of it for her pre-natal visits but most of it will go towards the hospital bill in 2012.  By then you should be married and have her on your group plan.  (After the baby is born, if there is no chance of another pregnancy between now and 2014 and mom is healthy, contact me again.  There are strategies to help keep your health insurance significantly lower.)
  2. What if there are complications and mom dies?  -  I hate even asking this question but it has to be asked.  If this is your first marriage, I assume you are both young adults.  The odds are you are just starting to get your financial houses in order.  If that is the case, I suggest that you have her get a term life insurance policy, if she can, so that there is sufficient money to set up a trust fund to use to raise the baby if something happens to her.  Some insurance companies will not approve life insurance on a pregnant female.  Some will still approve life insurance during the female’s first Tri-mester.  (Sorry about the jargon but get used to it.  If you are going to be hands on during the pregnancy, and it looks like you are, you are about to learn several new words.)
  3. What if she cannot be added to a group plan?  -  After you are married, if you add her to your group plan within 30 days and they cover maternity, you won’t have anything to worry about except that high deductible.  If you wait too long to add her to your group, she will have to pass medical underwriting.  If she is pregnant, she won’t until after the baby is born.  If your group plan does not provide maternity costs, you accidentally wait too long to add her to your group plan or her parents will not allow her to stay on their group plan after you are married, let me know.  There are some strategies that I have used for other young couples in similar circumstances.  They are legitimate strategies but they can be quite disruptive and expensive.

If these suggestions do not answer your concerns, let me know.  If you have a Skype account, let me know your account number and a good time to call and we can have a virtual appointment to discuss your options.”

THE REST OF THE STORY

He did respond with further information.  To protect his privacy, I am not free to disclose any details.  Let’s suffice to say that it looks like the wedding will be moved up to allow the bride to still look good in her wedding dress if the doctor confirms her pregnancy next week.

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