Every health insurance plan sold to individuals on HealthCare.gov must cover a set of “essential health benefits” that include maternity care. This has annoyed some people ever since the law was passed. They wonder why their premiums should go toward a service they know they’ll never use.
One such person is Seema Verna, the Indiana Medicaid official whom President Trump has picked to head the Center for Medicare and Medicaid Services, which runs those two programs as well as the health insurance exchange. At a recent Senate hearing she said maternity coverage should be optional.
What that would mean
To find out what would happen in that case, we consulted someone who should know—Shari Westerfield, vice president for health of the American Academy of Actuaries. The job of an actuary is to use really, really advanced math to figure out what premiums insurance companies should charge for the risks they cover.
“As soon as you make something optional, who’s going to buy it?” Westerfield said. “Only the people who are going to use it. So you essentially end up charging them what it’s likely to cost.”
And that is a lot—an average of between $18,000 and $50,000 for maternity care depending on whether you are paying out of pocket or have insurance, and whether you end up having a cesarean.
For another clue as to what would happen, we can look back at the pre-Obamacare situation, when only nine states required individual health insurance to cover maternity benefits.
But you could not buy such a plan when you were already pregnant, because pregnancy was considered a pre-existing condition. The market for maternity coverage was so dysfunctional that in 24 states insurers did not offer a single individual plan that included it, according to a study by the National Women’s Law Center.
In 12 of those 24 states, if you were planning on having a baby you could buy an optional maternity “rider” but typically had to pay for it for a year or two before you could use it—at a hefty additional premium. And the plans sometimes came with a separate, high maternity deductible. In Georgia, a fairly typical state, a rider cost between $158 and $204 a month.
But in the other 12 states, a woman literally could not purchase individual maternity coverage at any price.
How we all pay for it
“The only way insurance works is to spread the risk across a broad population,” says Judy Solomon, a health care expert at the Center on Budget and Policy Priorities. “We don’t ask people to buy a breast cancer or prostate cancer rider. It’s contrary to the whole concept of insurance.”
In case you were wondering, if you get your insurance through anything other than the individual market you are already paying for other people’s maternity coverage even if you don’t need it yourself. Federal anti-discrimination laws mean that virtually all employer health plans cover maternity care at no extra cost to the women who use it.
Even Medicare covers it, for younger women who are in the program because they receive Social Security disability benefits. And Medicaid, which is funded by all taxpayers, foots the bill for about half of all births in the United States.
Nancy Metcalf is an award-winning independent journalist specializing in health topics. A senior writer and editor for Consumer Reports for more than 25 years, she is a nationally recognized expert on health insurance and health reform.