Should I Switch Insurance Before Having a Baby?

Dear Kristin,

If I want to have a baby in the next year or two, should I switch health insurance before getting pregnant? It's hard to know if and when my partner and I could get pregnant, but I want to make sure I have a good health plan to cover the costs so I'm not stuck with big bills from doctor's appointments and labor and delivery (we're on separate health plans). No one tells you how much it'll cost to have a baby, so I just want to make sure I'm prepared—at least when it comes to my health insurance.

Sincerely,

Budgeting for Baby

Dear Budgeting,

This is such an exciting time—congratulations on this next step as you consider parenthood. As you’ve already figured out, becoming a parent is not cheap, and you could face some pretty big bills, even before your child arrives. So should you switch health insurance to lower your medical costs? Maybe. It really depends on the health insurance you and your partner each have and which will provide you the most comprehensive benefits, at the lowest cost.

So let’s walk through how you should evaluate these things.

First, you need to figure out if you can even switch to your partner’s plan. Not all employers allow this. But assuming it’s possible, you have to consider three scenarios:

• How much it will cost to stay on your own plan.
• How much it will cost to have your partner join your health insurance.
• How much it will cost for you to join your partner’s plan. 

Now grab a calculator and the plan details for your and your partner’s insurance. Take a look at the costs for the premiums, deductibles, coinsurance, and copayments (typically referred to colloquially as “copays”).

• Your premium is probably one of the numbers you know the most about. It’s how much you pay each month for your insurance.
• Your copay is the fixed cost you pay for a covered health care service, like a doctor’s visit, or for a prescription.
• Your deductible is how much you will be expected to pay before your health insurance provider starts to pay, and coinsurance is the percentage amount you’ll be expected to pay after your deductible is met.

Add up all of these costs for the three scenarios. Is one much cheaper than the rest? If so, you could just go with that option. But there are other things to consider. Having a child might involve multiple visits to doctors, specialists, and perhaps even a hospital stay—and that’s if things go well (which I hope for you, they will). 

It would be wise to consider the possibility that you or your child might need even more extensive medical care, so you also need to look at your plan details and check your out-of-pocket maximum—the most you have to pay for covered services. While one option might save you more on copays and premiums, it won’t make much sense if your out-of-pocket maximum is much higher than another option that carries slightly higher copays or premiums. 

Then there are the intangibles. I don’t know your circumstances, but if you’re like me, you might have medical professionals that you have had for a while and don’t want to change. If you currently have a provider, are they in-network under your partner’s plan? If not, you might need to pay more money to continue seeing them, or switch providers. Do you want to do that? While you are clearly trying to be aware of the financial costs, if you can afford it, there’s nothing wrong with choosing to pay more money for premiums, copays, or out-of-network visits to keep a provider that you like. Afterall, becoming a parent is a huge physical, emotional, and personal milestone. 

Sometimes the best financial decision isn’t always best for us overall, particularly when it comes to our health. So don’t feel guilty if you find yourself in that situation. And remember: Your health insurance will one day cover your child, too, so you will want to factor that into your decision as well.

-Kristin

If you have questions about money, Kristin is here to help. Submit an anonymous question and she may answer it in a future column.