Health Insurance Woes: My $22,000 Bill for Having a Baby

Our six-month-old daughter cost over $22,000.

You’d think, with a number like that, we must have used fertility treatments—but she was conceived naturally. You’d think we went through an adoption agency—but she is a biological child. So surely, we were uninsured.

Nope. Birthing our daughter was so expensive precisely because we were insured, on the individual market. Our insurer, CareFirst BlueCross BlueShield, sold us exactly the type of flawed policy—riddled with holes and exceptions—that the health care reform bills in Congress should try to do away with. The “maternity” coverage we purchased didn’t cover my labor, delivery, or hospital stay. It was a sham. And so we spent the first months of her life getting the kind of hospital bills and increasingly aggressive calls from hospital administrators that I once believed were only possible without insurance.

About 63 percent of Americans receive medical care through their employer and nearly 20 percent are uninsured. 16 percent receive some insurance through a federal program like Medicaid or Medicare. The rest of us—between 5 and 7 percent—pay for insurance out of pocket. That’s a small share of the total at any one time, yes. But it amounts to at least ten million [2] people (the American Medical Association says it’s more like 27 million [3]; that number would be even higher if premiums weren’t out of reach [4] for many.) Over the course of our lives, roughly one in four [5] Americans will buy their own health insurance. We’re the freelancers, the newly unemployed, the entrepreneurs, the people who are transitioning out of college or grad school or between jobs, or the ones who work for employers with fewer than 20 employees. Our numbers are growing. An estimated 14,000 Americans lose their job-based health insurance every day.

The individual insurance market is like that old joke about the food being terrible and the portions too small; it’s expensive [4], shoddy, and deeply unsatisfying. Those of us who buy into it are not protected by the federal and state laws that govern employer-based health care. In fact, there’s no one looking out for us at all.

I didn’t know any of this 20 months ago, when my partner and I began hunting for health care. After several years in Europe—where coverage was, as goes the cliché, comprehensive and nearly free—we came back and searched for policies that provided maternity benefits. We found that health insurance purchased on the individual market hardly ever extends to pregnancy. A few policies offer the opportunity to buy additional coverage—known as a “rider”—to tack a maternity benefit onto your plan. It’s almost always only available in anticipation; if you try to buy the rider once you’re already pregnant, the fetus becomes a “pre-existing condition.”

Last fall, the National Women’s Law Center issued a report [6] detailing exactly how women who want to bear children are derailed when searching for out-of-pocket health care. Only 14 states require maternity coverage to be included in insurance sold on the individual market, according to the Kaiser Family Foundation [7]. In contrast, the Pregnancy Discrimination Act of 1978 requires employers with more than 15 employees to include maternity benefits in their health insurance packages. “We looked at 3,500 individual insurance policies and only 12 percent included comprehensive maternity coverage,” said Lisa Codispoti, Senior Advisor at the National Women’s Law Center. Another 20 percent offered a rider that was astronomically expensive or skimpy or both. One charged $1,100 a month; others required a two-year waiting period.

When we searched for health insurance on the individual market, we were told CareFirst offered the best maternity coverage we could get in the District of Columbia. And when we read the company’s membership booklet, we thought we were safe. “For an additional $126 a month, you will receive benefits for covered pre- and post-natal care as well as covered services associated with the delivery,” the booklet promised. It assured coverage for “Obstetrical care for a normal pregnancy, including cesarean section if medically indicated, abortion or delivery including prenatal care and postnatal care … Routine newborn care while the mother is hospitalized for covered maternity care, provided the mother is a Member and eligible for extended maternity benefits.”

It sounded solid, so we began paying about $500 a month (a number which rose twice during the pregnancy—today we pay $680) plus several hundred dollars a year in deductibles. I got pregnant seven months after purchasing the policy and assumed it covered all my prenatal care through labor and delivery. After all we spent more than $12,000 on co-pays, tests or services that weren’t covered, insurance and the deductibles (the pregnancy spanned two calendar years). But we hadn’t read the fine print.

Six weeks after I gave birth we received a bill for over $10,000 from Shady Grove Adventist Hospital in Maryland, for labor and delivery, pharmacy, supplies, room and board, and lab work. Our insurance had denied the claim. The hospital began calling us incessantly. CareFirst, the hospital reps insisted, told Shady Grove we had “maxed out our benefits.”

Why? For months we got nowhere in answering that question. Our calls to CareFirst went unreturned. Our lawyer’s letters went answered. One CareFirst rep we actually managed to reach explained we had maxed out because the benefit was “capped” at $3,000 per pregnancy. That means $3,000 for all pre-natal visits, tests and sonograms, labor and delivery, hospital stay and hospital care. In what mythical U.S. hospital is nine months of medical care paid for with $3,000? The study by the National Women’s Law Center found that (in 2006) a normal vaginal birth cost, on average, $7,488 in hospital charges alone. Using examples of riders similar to mine, NWLC found that women with uncomplicated vaginal births would pay between $6,780 and $9,682 out of pocket. C-sections came in around $13,000 nationally, and for them, the out of pocket costs ranged from $10,000 and up. I presented those numbers to CareFirst, and they freely admitted they knew their policy in no way came close to covering a pregnancy. “It’ s a crappy benefit,” one rep admitted to me.

Why didn’t we know that my coverage was capped at $3,000? Partly because of the lack of federal oversight of the individual market, coverage comes with layers of mind-boggling fine print. All of the upfront materials we read detailed how extensive the coverage would be. When we combed through the supplementary books, pamphlets and fliers during our battle, we finally saw one tiny table, stuck into an appendix, indicating that benefits for “maternity and related services” were limited to $3000. Our $3000 had been spent on anesthesiology, our midwife and obstetrician, leaving nothing left for the labor and delivery or hospital stay.

We were floored. How could they list all of the coverage they provide in one place, and then negate that in an addendum? “Many people who believe they have adequate health insurance actually have coverage so riddled with loopholes, limits, exclusions, and gotchas that it won't come close to covering their expenses if they fall seriously ill,” a Consumer Reports study published [8] in May found. No wonder, then, that a new report from the American Journal of Medicine found that in 2007, 62 percent of declared bankruptcies were by people with staggering medical bills—even though 80 percent of them actually had health insurance. A new baby is expensive enough. We were flabbergasted by the idea that we’d paid so much in insurance and had nothing to show for it.

And as unsatisfying as individual-market coverage is, it’s also easily taken away. After 36 hours of labor, I ended up having a cesarean section. Now I’m considered at risk of having a second; the c-section is a pre-existing condition. As a result, unless I’ve been sterilized [9], I may have a hard time switching policies within the individual market.

In both the House and Senate, proposals have been floated to deem maternity care essential for everyone, not just those with employer based insurance, to do away with pre-existing conditions as a means to deny coverage, and also to end the rampant practice of gender rating, or charging women more than men for insurance, on the premise that we go to the doctor more. Sign me up. In the meantime, I’ve been stuck on the phone with hospital administrators.

In early June, our billing disaster came to a head. A hospital administrator told us that because CareFirst had never bothered to let Shady Grove know our claim was under review, we had to pay, in full, in the next 90 days. Otherwise, the bill would be sent to collections. He cheerfully suggested we just “put it on a credit card;" the hospital had run a credit check on us and said we could afford it. He noted “upon arrival in the hospital you agreed to cover all costs regardless of insurance reimbursement.” Of course we had. After 12 hours of laboring at home, who wouldn’t sign a form to ensure proper medical treatment for mother and child? Plus, we thought we were covered.

To my own amazement, this story has a happy ending—but only, I think, because you’re reading it. In early June I called CareFirst’s press reps and told them I was writing about their “crappy” maternity policy. That day, I got kicked up the food chain. With a top Customer Service manager at our service, our claim went back under review. Last week, she called to tell me the policy had been reviewed and changed after feedback from customers; “members were really unhappy with the benefit,” she said.

This change, she said, applies to CareFirst clients throughout the District of Columbia. We will no longer have a $3,000 cap per pregnancy. In fact, the manager continued, this change should have been in effect since fall 2008, but due to poor “internal communication” no one “on the front lines” knew. CareFirst has now paid 90 percent of our hospital fee. And the company, the rep promised, was about to adjust the claims paid to all women denied coverage since the change went into effect.

When I asked if this had come about because I’m a journalist, the rep demurred. The timing suggests otherwise, but it’s possible, at least, that we might have won because we put up a fight in the first place. Karen Pollitz, the project director at Georgetown’s Health Policy Institute, says insurance companies assume most people won’t challenge a denial of coverage even if they’re entitled for a review. “The individual market stinks,” Pollitz told me. “It’s terrible. It’s broken as can be. Coverage is unsubsidized, largely unregulated. You are at the mercy of the insurance company and if they think you will make a claim they will avoid you.”

Six months of calls, anxiety and aggravation prove the point. For us, healthcare reform can't come fast enough. God forbid we need our insurance before then. Who knows what else we aren’t covered for.