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Monday, November 28, 2011

SHOW ME THE MONEY! Part One - If Maternity Coverage was an umbrella, I would be soaked!

Ok Cash Baby, enough with the prize winning writing, lets see some numbers

Some Latin "Res Ipsa Loquitor" - a term in learned in legal studies which means "the think speaks for itself"

drumroll........

Here is the math based on numbers quote for a 32 year old male and 35 year old female with maternity for HSA*

With Maternity Insurance
Premium: 937
Minimum Required Term Prior to Benefits: 22 months **
Total Insurance Premiums: $20,614
Hospital CoPay: $3,000
Anesthesia: 1000 Estimated (unclear if it is included above)
OB PrePay: $2200 plus labs
Guaranteed Out Of Pocket: $26,184

Without Maternity Insurance
Premium: 300
Minimum Required Term Prior to Benefits: 10**
Total Insurance Premiums: $3000
Hospital Payment: $6,000
Anesthesia: $1000 estimated
OB PrePay: $2200 plus labs
Guaranteed Out Of Pocket: $12,200

which would you rather spend?

*HSA (Health Savings Account) is a term for High Deductible Qualified Plan that allows the insured to manage thier own savings account and the contribution to the account is deposited post tax but the total contribution comess off of end of year personal taxes. For more info see http://www.treasury.gov/resource-center/faqs/Taxes/Pages/Health-Savings-Accounts.aspx
** 22 months assumes 12 months of coverage prior to becoming pregnant plus 9 months of pregnancy, which is actually 10 months since pregnancy is 40 weeks. assuming you are pregnant on the anniversary of the policy inception (which is highly unlikely)
Disclaimer: this is a HSA to HSA comparisson. there are other plans PPO, etc that can be enrolled in with different premiums and coverages. We choose to use the HSA for the tax benefits and the control it gives us over our own money.

1 comment:

  1. There is no such thing as maternity insurance and why should there be? It is an event that can be caused and/or prevented at will by the insured. The real question is would you rather pay for it up front within your insurance premiums spread out over a 2-3 year period, or a lump sum out of pocket at the time of pregnancy and delivery.

    Paid within the insurance premiums is obviously a bad deal in this comparison. It is obvious the insurance company is not in the business of providing financing for pregnancy to customers and I can't blame them. As an aside, I did have a personally paid policy in 2010 that had a $5000 pregnancy deductible which cost me about $100 extra a month with a 24 month waiting period (33 year old). At 36 months total cost of $3600, and a total pregnancy and delivery cost of around $9,500, I recognized a discount of about $900 by including it in my insurance, but it also came with many hassles in order to eventually recognize the savings (correcting submissions etc). So overall your mileage may vary, but I think insurance companies are starting to push their customers away from these "financing" options. No profit in it for them and they aren't a bank.

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