Maximizing Your Insurance Benefits for a Home Birth

Most of the families who reach out to me for midwifery care and desiring a home birth want the personalized, evidence-based care that my midwifery practice offers. If you look at the statistics and the benefits and outcomes of midwifery care, they are extremely impressive and don’t require a sales pitch.

And then the conversation shifts to how to make this goal of gently welcoming their baby at home financially attainable. There are a million and one ways we can discuss how to save money and ways to finance the birth of your dreams. We could also talk about how much insurance companies are paying for hospital births. But the longer conversations, and what I want to share, are about using insurance to pay for fantastic midwifery care, as there are just so many moving parts when it comes to insurance and home birth.

A Little of My Own Story…

I am the mom to 5 amazing kiddos. My first two births were fully covered by insurance, and I saw midwives for my care and had two unmedicated births with great providers at a military hospital. On paper, this sounds perfect… but those first two hospital births are what pushed me into birth work and into caring for moms and desiring to help each baby have a gentle, loving welcome.

My last 3 babies were born out of the hospital, 2 at home, and our last baby at a Japanese birth center. We utilized insurance coverage a bit and paid a majority out of pocket for these 3 births.  I truthfully say it was the best money our family has ever spent. But I think it is important to know I too have been there, looking at the numbers and going back and forth on if it is worth it. I truly believe money spent for out-of-hospital midwifery care is an investment you will make not only for this pregnancy but one that will impact you, your family, and your baby forever.

Will Insurance Cover Home Births?

The simple answer is yes, more and more insurance companies are covering midwifery care and out-of-hospital birth expenses. However, each plan and policy varies greatly.

The easiest way to see what is covered, and where I encourage my midwifery clients to start, is by calling your insurance member services or having a medical biller do this for you and getting a “verification of benefits.”

Often when calling the insurance companies, clients will be told that midwifery care and home birth “are covered.” They then have the expectation that what they pay their midwife is the rate at which they will be reimbursed. (See below for an explanation on “allowed” vs. “billed amount”). The most important fact to remember is that often your out-of-network benefits apply before your insurance will reimburse anything.

A tip to know when calling to confirm verification of benefits is that some insurance companies will grant a “Network Exception” or “Out of Network Referral.” Having this exception in place allows for in-network benefits to be applied for this provider and care rendered vs. the out-of-network rates. This is a huge benefit because the in-network deductible and co-insurance are much lower than the out-of-network deductible. Also, most clients are able to meet their in-network deductible because they are typically seeing more in-network providers vs. out-of-network.

Ask if applying for a Network Exception or Out of Network Referral is a possibility and what the process is. Sometimes this request must come from the member side, others from the provider side. As most midwives are not in-network and have limited time and ability to focus on this, using a medical billing expert is so helpful when dealing with this. More and more insurances seem to be denying these exceptions, but if they do grant them, the reimbursement can be significantly more.

How Much Does Insurance Cover?

Plans and policies vary greatly. However, each insurance has an “allowed amount,” which is the maximum payment a health plan will pay for a covered service. The allowed amount that is paid for maternity fees is similar for all major insurance companies (with exceptions for employer policies, Blue Cross Blue Shield plans, etc.).

The typical amount of coverage seen for clients is between $2,000-$3,000. There will be a difference between the “billed amount for services” (what your midwife charges you to practice sustainably) and the insurance “allowed amount.”

Know that your benefits will be applied to the “allowed amount” determined by your individual insurance company. If you want to find out the “allowed amount” from your individual insurance, you can ask a medical biller for specific codes to call your insurance company and ask about. But again, many insurance companies will rarely provide these for out-of-network providers, as these providers do not agree to their in-network rates, so you will often get close with determining a hypothetical reimbursement rate.

Here is an example of what your insurance reimbursement might look like:

• Midwife fee/Billed Amount: $8,000

• Insurance Allowed Amount: $4,000

• Deductible: $2,000

• Coinsurance: 50%

• Reimbursement to client: $1,000

Clients who have a high deductible ($3,000+) are often confused why that deductible wouldn't get met if they are paying their midwife $8,000. Again, this comes down to the “Allowed Amount” (determined by the insurance company) being the amount that applies to their benefits. Anything above that allowed amount is the client's responsibility and does not go towards their benefits.

What to Look for if Choosing a New Insurance Plan or Company

• As the majority of midwives are not contracted and in-network with insurances, it is generally most cost-advantageous to choose a PPO plan. There is a very slim chance that you will get any reimbursement from non-contracted midwives if you are on an HMO insurance plan. You can also attempt to confirm that midwives and home birth are covered under the plan you are considering, but sometimes it is difficult to do that until you get the plan in place.

• Secondly, look at what your Out of Network Benefits are with the PPO plan (deductible and coinsurance). The lower your deductible, the more likely it is that you will get a reimbursement from the fees you pay for your home birth. However, generally, the lower your deductible is, the higher your monthly premium for insurance is. So it is a trade-off you will need to consider.

• Also, consider what other medical expenses you will have this year and how you plan to use your insurance. Maybe the year your baby is born is a great time to finally get other medical procedures done that your family has been holding off on if your deductible has been met.

• Also, if you plan to see other out-of-network providers this year (lactation consultants, acupuncture, chiropractic, pelvic floor specialists, etc.), going with a lower deductible PPO might be your most cost-advantageous plan so you can also get reimbursement for care from these other out-of-network providers.

• If you plan to mostly see in-network providers or rarely see a doctor, the best choice might be to keep a low monthly premium, choose a higher deductible plan, and budget to just pay out of pocket for your home birth midwifery expenses. In all honesty, sometimes the higher monthly premiums end up costing more than just paying out of pocket for your midwifery care.

  
  

What About Using Health Savings Accounts (HSA) or Flexible Spending Accounts (FSA)?

These funds are tax-advantaged ways to pay for a home birth. You contribute your own money, but the advantage is it is withdrawn from your salary pretax. This is a great way to save about 20% on any amount you put into the account, as you are not taxed on the funds when they are used for qualifying expenses. This is especially advantageous if you are paying out of pocket for your midwifery fees anyway. Many midwifery clients have had great luck getting reimbursed or using these funds for their birth kits and midwifery fees through these accounts.

Utilizing Health Shares and Health Care Sharing Ministries

Health Shares (or Health Care Sharing Ministries) are non-profit, member-based organizations where people with similar beliefs or values share the cost of each other’s medical expenses. These groups function as a lower-cost alternative to traditional health insurance.

In general, these groups are a fantastic way to have your home birth “covered.” Each group is different, and some have a maximum allowed amount, while others will cover certain amounts for prenatal/postpartum care and separately for birth assistants and birth kit supplies. If your midwife includes those in her pricing, you might talk with your health share and see if you will get more coverage with an invoice showing itemized expenses vs. global care billing.

Most of these groups do have a window of time you need to become a member prior to becoming pregnant (on average 3 months). So definitely have this option in place well in advance of becoming pregnant. They often do also have pre-existing health condition exclusions.

Some groups you might consider are:

• Medi-share

• Christian Health Ministries

• Samaritan Ministries

• Solidarity

• Christian Care Ministry

• WeShare

• Liberty HealthShare

• Altura

  
  

Other Ways to Save

Cash Pay Labs

You might increase your cost savings by paying for your labs and ultrasounds using cash-pay lab pricing during your pregnancy. I encourage you to talk with your midwife if she has a cash-pay lab pricing option. Often these cash-pay options are so much more feasible, and then the client can get reimbursed for them in the same way as if you were to utilize the larger name labs (e.g., Progesterone Testing is roughly $20 through my cash-pay pricing company and over $150 through Labcorp/Quest).

Co-Care

Many HMO clients will continue to see providers who are covered by their insurance for some or all of their pregnancy. This allows them to get a majority of ultrasounds or labs done with their insurance and save on those out-of-pocket expenses. It also allows them to get referrals for pelvic floor therapy, chiropractic, doulas, breast pumps, additional desired antenatal testing, etc., through their HMO network and reduce those out-of-pocket expenses.

Coverage for Tricare/Military Families and Families on Medi-Cal

Currently, Tricare will reimburse Tricare Select (the military version of a PPO-style health care plan) for care with Certified Nurse-Midwives (CNM). As Certified Nurse-Midwives do not have a formal training pathway for gaining experience for out-of-hospital births, and this licensure requires a nursing degree, a limited number of CNMs serve families out of the hospital, and finding an out-of-hospital CNM provider is difficult.

What is the history behind the lack of reimbursement?

In order for a health care professional to receive federal reimbursement, they must be federally recognized healthcare professionals and nationally credentialed through an accredited pathway. While the Certified Professional Midwifery (CPM) credential meets this requirement, CNMs are currently the only federally recognized midwives because at the time midwifery was incorporated into federal statutes, this educational path was the only accredited midwifery education path. While legislative work is being done to add Federal Recognition to CPM licensing, there is still a great deal of work to be done, so please contact your federal representatives!

One tool that Military families eligible for Tricare can utilize is the HCFSA, which is similar to an HSA. I have had multiple families utilize this for both midwifery fees and Birth Kit supplies.

Military Health Care Flexible Spending Accounts

For additional information, I also refer clients to:

• Ultimate Guide to Home Birth Insurance Reimbursement: How to Get Your Out-of-Hospital Birth Covered

  
  

Disclaimer: This is not financial or medical advice and is for informational purposes only. A Joy Birth Services, Inc. is not responsible for any actions readers may take based on the content provided, and following these tips does not guarantee any specific outcome. A huge thank you to Maureen George - Medical Billing Services for insight and expertise when working through these questions.