Lower Premiums Can Cost More in Long Run With Maternity Care

TUESDAY, June 12 (HealthDay News) -- Lower premiums may not always be worth the short-term savings, at least when it comes to maternity care.

A new study released Tuesday by the Georgetown Health Policy Institute and the Kaiser Family Foundation found that those who chose consumer-driven health plans (CDHPs) over traditional health insurance plans were more likely to have lower premiums, but they also faced higher deductibles and out-of-pocket costs in the end.

Even if the birth involves no complications, women and their families could end up responsible for thousands of dollars in health-care costs with CDHPs, the report suggested.

"You may be saving money up front with the premiums and you may have some savings as well, but the insurance is complicated," said Alina Salganicoff, vice president and director of Women's Health Policy at Kaiser. "This particular model puts even more of the onus on the consumer to make the choices but they don't always have the information to make the choices."

With some 4 million births in the United States every year, childbirth is the leading reason for hospitalization. Sixty percent of all hospitalizations of women of reproductive age are for obstetric care, and 25 percent of all hospitalizations in the population as a whole are for obstetric care.

Having a baby can be expensive, with medical costs easily reaching $10,000 or more for even a simple delivery. The cost of hospitalization to prevent or delay pre-term labor in 2001 averaged more than $75,000 per case with an average hospital stay of almost 25 days, the report found.

Meanwhile, the insurance landscape is changing rapidly with the introduction of consumer-driven health plans, which purport to put the consumer in control.

"It's a really big issue, and a lot of the marketing had been around lower premium cost and allowing people to be in the driver's seat, so we really wanted to know how does that play out in the real world," Salganicoff said.

The study looked at three different scenarios of pregnancy and labor and how much each would cost with 12 different consumer-driven health plans.

For an uncomplicated pregnancy with a vaginal delivery, total allowable costs under a traditional health insurance plan were estimated to run $9,660 and out-of-pocket costs were $1,455. For consumer-driven health plans, out-of-pockets costs ranged from $3,000 to $7,884.

In the second scenario, an uncomplicated pregnancy with Caesarean-section delivery, allowable costs under a traditional plan totaled $12,453 and family out-of-pocket costs $2,244, compared to a range of $3,545 to $9,818 in consumer-driven health plans.

The third scenario was a complicated pregnancy involving gestational diabetes, pre-term labor, C-section delivery and a stay in the neonatal intensive care unit for the newborn. Total allowable costs under a traditional health plan were estimated at $287,453. Out-of-pocket costs under that plan could reach $8,770, vs. $6,000 to $21,194 for consumer-driven health plans.

Meanwhile, the new, consumer-driven plans present a host of other potential problems, the study reported.

For instance, in all CDHPs examined here, prenatal care was not considered to be a preventive service, an exclusion that would result in high cost-sharing. "In all of the plans we reviewed, it's not considered a preventive service. It's treated as a medical expense so there's not really the incentive to get the early preventive care," Salganicoff said.

Many plans in the individual market don't cover maternity care at all and women could be denied coverage if they are pregnant when they apply.

And even with the best planning, a woman may end up with an out-of-network provider, for example if the anesthesiologist on call when she delivers is not in-network.

Specific exclusions can also drive up costs for the consumer. Some policies, for instance, restricted coverage for PKU (Phenylketonuria) formula and for treatment for congenital or genetic birth defects such as cleft palate.

The details of the newer plans are also often difficult to figure out and language is often vague or ill-defined (such as "complications of pregnancy").

"It's really important for people, and particularly women of reproductive age, if they're looking at high-deductible health plans, to see if they cover maternity care, particularly if they're looking at the individual market," Salganicoff said. "We found very, very limited coverage of maternity care in the individual market."

In addition, women need to be aware that many aspects of pregnancy and delivery are hard to predict, meaning that costs could shoot up unexpectedly.

"If you're getting an emergency C-section, you're not at the point where you're going to shop around for the best price," Salganicoff said.

Responding to the report, Carol Pryor, senior policy analyst with the Access Project in Boston, said, "Consumer-driven health care is based on the assumption that if you require people to spend their own money on health care, they will become more informed consumers. In this regard, many have pushed providers to become more transparent in their pricing. This report makes clear, however, that insurance contracts are so confusing and opaque that it is almost impossible for consumers to make rational decisions about which health plans to purchase.

"While consumer-driven insurance policies may offer lower premiums, the almost impossible to predict out-of-pocket costs under these plans can leave consumers at serious financial risk, threatening their access to needed care as well as their economic security," she added.

More information

Visit the Kaiser Family Foundation for more on the report.

SOURCES: Alina Salganicoff, Ph.D., vice president and director, Women's Health Policy, Kaiser Family Foundation, Menlo Park, Calif.; Carol Pryor, senior policy analyst, the Access Project, Boston; June 12, 2007, Maternity Care and Consumer-Driven Health Plans