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The Cost of Pregnancy

How much does health insurance reimburse an obstetrician for the care and delivery of a pregnant woman? We are talking about prenatal care, planning, addressing complications, vaginal or cesarian delivery, and postnatal follow-up. Let’s talk about the cost of pregnancy because how much insurance companies reimburse your obstetrician is very different from what you’d expect.

Do We Need Obstetricians?

Let’s address the biggest elephant in the room: is an obstetrician even necessary for the birth of most babies? Plenty of women deliver using a midwife, and they deliver at home with few complications.

It’s not to say you shouldn’t involve an obstetrician; any good midwife has great relationships with OBs who can step in when complications arise or when a cesarian is necessary.

Healthcare definitely needs obstetricians, but not every pregnant patient may need one. Each expectant mother should consider their own health literacy and appetite for risk to decide when and whether to hire an OB.

A great obstetrician can do the job of a midwife and then some. Many, especially in the cash space, may also work with a midwife and/or birth doula.

Insurance Reimbursement for Pregnancy

Imagine you’re an OB who decides to open your own medical practice. The first thing you’ll do as a new medical practice is to obtain insurance contracts that will reimburse your obstetrical care:

  • Anthem Blue Cross
  • Blue Shield of California
  • Health Net
  • Cigna
  • Aetna
  • United Healthcare
  • Medi-Cal
  • Covered California plans

In the US, there are many different types of health insurance plans: PPOs, HMOs, EPOs, and POSs.

The HMOs and POSs often offer the physician a lump sum for the entire prenatal, delivery, and postnatal period. If the patient has a relatively straightforward pregnancy, then the medical practice will spend little time and resources, and the patient will do quite well.

But imagine the patient needs a lot more guidance, requires a C-section, needs better pain control, has mood complications in the postnatal period, or other pain or breastfeeding hurdles that need to be addressed. This person will require a lot more time and effort, which will make the lump sum much less favorable.

And, these lump sums from HMOs are often in the $1,800 range as of 2024. They used to be closer to $2,300 here in California; some can be as low as $1,600.

With PPOs and other fee-for-service reimbursement models, where the doctor gets paid for every single visit and every single procedure and also reimbursed at a higher rate for a cesarian vs. vaginal delivery, total reimbursement might be in the $10K range, even as high as $15K.

Usually, such patients will have a HDHP where the out-of-pocket will fall in the $7K-15K range. In fact, for a family, it’s fairly common to see a HDHP with a maximum out-of-pocket expense of $17K.

The Value of Obstetrical Care

For my patients, I want them to visit with an obstetrician who can get to know them, help them come up with a good birthing plan, anticipate complications, discuss emotional support, exercise, diet, and supplements.

During the delivery, I prefer for my patients to have an OB who has a good rapport with nurses, midwives, etc., who can assist with the delivery.

If the OB will deliver the baby, then I consider it best for the OB to have a colleague they work with so that all the pressure doesn’t fall on them should the delivery happen in the middle of the night.

The Actual Cost of Pregnancy

It’s tough to answer how much care should cost because good care is hard to measure, and one obstetrician may have a lot of support staff and deliver in a more expensive inpatient setting, while another may have few support staff and offer more affordable delivery settings.

Looking at the numbers above, $1,800 certainly seems absurd because I paid that much to have the cooling fan serviced in my car.

$15K might make sense if it’s an all-inclusive plan, especially if any complications and all testing is accounted for.

Otherwise, it might be in the patient’s best interest to choose a base cost of $5,000 – $8,000 and agree with their OB that any further necessary interventions are charged at cost to the patient.

This way, the Obstetrician is still fairly compensated for their time and effort and doesn’t have to pay for your care out of pocket. But you also don’t feel like you’re going to have more done to you so that the OB can profit more.

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