I recently wrote a post about paying for pregnancy. A comment from a reader caught my attention and I felt that it deserved a mention and a few more of my thoughts on the matter.
The problem with having a pool of money from all insurance companies to pay for pregnancy (or anything else) is that then there is no competition, and the prices will skyrocket. The health care providers will know the money is there; they’ll know that it *has* to be there, by law. Therefore, they can charge anything they want, and know that the bill will be approved and paid. Or, if the price for such services is standardized, then quality will plummet, as there is no incentive for doing well. Any time things start being standardized and mandated, you run into this kind of problem.
I’ve been thinking about this, and I don’t see it the same way. I do think that the price for basic maternity care should be standardized and paid for with a combination of money from the parents, and a pool of money from various sources including health insurance companies and the government (I assume that the government wants to encourage people to have children in order to keep creating taxpayers). There are lots of services that are not necessary for a healthy childbirth (ie, 3D ultrasounds, epidurals, elective induction of labor, etc.) but that are routinely performed on pregnant women in this country. I would not have these things included in the basic care package. If a patient wants to add extra services during her pregnancy, she should pay for them. The idea that the quality of care would diminish doesn’t hold up, because women can still choose from a large number of OBs. If one is not providing quality care, patients will begin to go elsewhere. Even though doctors would have to charge the same amounts for basic services, they would be able to set their own prices for the additional services not covered in the basic maternity package. These prices would be driven by market factors just like any other commodity.
My plan would actually increase the competition among doctors and the choices that a woman has when she goes looking for a doctor and hospital. If maternity coverage were a separate entity from health insurance, no one would be limited by insurance networks in terms of choosing a provider. So the incentive for doctors and hospitals to provide exceptional services to pregnant women would be huge. Simply being contracted with a huge insurer would no longer be a factor in driving patients to a particular provider.
Maternity care doesn’t really fall under the realm of health insurance coverage. Health insurance was designed to protect us from catastrophic, unexpected expenses for medical treatment. Unexpected is the key word. In Colorado, most of us pay into the health insurance system hoping that we don’t have to use our coverage much. But maternity is a different story. The vast majority of women eventually give birth. This is not a situation where people hope they don’t have to use their health insurance. The reason so few individual health insurance carriers in Colorado offer maternity coverage (and charge a high price for it if they do) is that they know that anyone who adds a maternity rider to their policy is planning to get pregnant, and probably soon. It is entirely contrary to the basic premise behind health insurance.
So instead of having some people with benefit-rich group plans paying $100 to have a baby and people with individual insurance (or no insurance) paying $10,000, lets level the field. The new parents should shoulder a reasonable chunk of the expenses – my thought would be somewhere around $1000 – $2000, in addition to paying for any services that are not strictly medically necessary. If disaster strikes and the mother and/or baby need intensive emergency care, of course I would advocate having health insurance companies foot the bill, much as they do now. That sort of situation is a perfect example of what health insurance should cover – a large, unexpected medical expense.
tag: pregnancy insurance
