Newborn health care costs can be steep and unpredictable. While many first-time parents assume that most — if not all — costs will be covered by their insurance provider, according to one study, new parents can expect to pay about $1,297 out of pocket during their babies’ first year.
This amount can differ based on a number of factors, from insurance coverage to the circumstances surrounding the birth, including the type of delivery and the follow-up care required.
You can help your employees plan ahead by working with them to understand the landscape of newborn health care costs.
Costs Associated With the First Year of Life
According to a 2016 study from the Health Cost Institute, health care expenditures for babies amounted to an average of $4,879 each year.
While estimated costs can be helpful in preparing for a newborn, it’s important to understand that insurance coverage, location of residence and the overall health of the baby are all significant factors.
Referencing a study from the University of California, San Francisco, Nerdwallet reports that costs for an uncomplicated vaginal delivery in California can range from $3,296 to $37,227 depending on the hospital. For Cesarean sections, the costs ranged from $8,312 to nearly $71,000.
Infants are routinely seen by physicians to ensure that they meet adequate growth milestones and receive appropriate vaccinations. In fact, well-newborn care is so central that it accounts for $12.9 billion of total children’s health care spending, according to a 2017 study published by JAMA Pediatrics.
Being Prepared for the Cost of a Newborn
Whether or not your employees feel confident about their ability to manage their new babies’ health care costs, you should encourage them to take the time understand how their benefits will be able to help them. Be ready to answer the following questions they’re likely to have about their insurance plans:
- Does my policy cover labor and delivery costs?
- If my pregnancy is considered high-risk — or if complications arise — will my policy cover specialists? If so, do I need a referral?
- Are there any common labor and delivery costs not covered by my policy?
- Do I have to meet any special requirements to ensure that my newborn is covered from the moment of delivery?
- After delivery, how long of a hospital stay will be covered?
- What out-of-pocket costs may be incurred for copays, deductibles or coinsurance?
- Are all my preferred doctors or hospitals within the provider network?
Also, let employees know about any special programs available to them. Many health care providers offer programs for mothers-to-be that provide education and support that can help reduce the risk of complications.
Make sure your employees understand why and how to add their new babies to their health care plan. This is an important detail that can sometimes get lost in the chaotic days after a birth. Employees will likely need to have their baby’s birth certificate and Social Security number at the ready in order to enroll.
Remember, your goal is to help your employees get a realistic grasp on their coverage. Be transparent about what your plan can and cannot offer — and look for opportunities to make improvements that will matter to new parents. When your employees can put aside financial stress to focus on their families, they’ll come back to work more satisfied and ready to work.
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