AboutMichael Higgins Expertise All questions pertaining to health insurance, whether group, individual/family, student, child-only, COBRA, HIPAA, Portability, dental. No expert knowledge in areas such as life insurance, disability, workman's compensation, auto, etc.
Experience 27 years as owner of health insurance agency, primarily dealing with Blue Cross Blue Shield of Arizona.
Education/Credentials College, Business Administration.
Expert: Michael Higgins Date: 6/21/2008 Subject: Health Insurance
Question Hi, here is my problem. My husband is a business owner, and we pay out of pocket for individual health insurance. His business is not big enough to qualify for group rates or programs. We have a 14 month old baby, and we would like to have another one. Problem is everyone has told us in the state of Colorado that when you buy health insurance on your own it doesn't cover maternity at all. Is this true? I don't work, and when we decided to have our son I got a job for 9 months to have maternity coverage. That isn't an option this time around. Is there anything we can do other than just paying for everything out of pocket? We don't qualify for medicaid or anything like that. Thanks.
Answer Hi Taryn:
As a broker in Arizona, I'm not too familiar with the plans in Colorado. I did look over the plans offered by Anthem Blue Cross Blue Shield, http://www.anthem.com/, and small group coverage is available to those with 1-51 employees. An HSA plan is a great idea.
If you choose not to enroll in a group plan, the other alternative is to purchase an individual/family plan, specifically an HSA qualified plan. Here's where it gets a little tricky. You will need to negotiate the best price possible with a doctor to deliver your baby. Most physicians have maternity packages, an all inclusive fee for visits before and after the birth, hospital charges, etc. Consider a mid-wife or birthing center as well. Once you have the best price, pay for the birth with tax-free funds out of your HSA account. As a family you can deposit up to $5800 per year in the HSA account.
Here's the big difference between group policies and individual policies. Most group policies cover maternity, but cost much more than individual plans. (Most people think group coverage is less expensive, but individual plans are much less expensive for very similar coverage.) Individual/family plans do not cover maternity. And here's the important point...on individual plans you do not get the negotiated rate for maternity, you will pay full retail. This is why you must negotiate on your own. In Arizona, full retail maternity is $15,000-$19,000. Blue Cross of AZ pays a negotiated rate of between $4500-$7000.
So, here's three things to do:
1.) Get a quote on group coverage with maternity.
2.) Get a quote on individual/family coverage with very similar coverage as the group quote, (no maternity obviously.)
3.) Shop around for the best price on a maternity package, including prices from a birthing center and a midwife.
My educated guess is that you will do better from a financial point of view with an individual HSA plan. Of course, I could be wrong, not knowing what the group rates are in Colorado.
