Expecting? Expect Denied Insurance Coverage Through 2014

Wednesday, November 24, 2010

A recent investigation by the House Committee on Energy and Commerce brought to light several disturbing findings about the inequities expectant parents face in the insurance market. Among them:

(1) Pregnant women are frequently unable to obtain health insurance in the individual market. The four largest for-profit health insurance companies each list pregnancy as a medical condition that results in an automatic denial of individual health insurance coverage; put differently, if a pregnant woman applies for insurance coverage in the individual market, insurers generally consider her pregnancy to constitute a preexisting medical condition and deny her coverage. The investigation also found that, because the law in some states requires insurers to extend coverage to policyholders’ newborn or adopted children, insurers sometimes deny coverage to expectant fathers and those who are in the process of adopting.

(2) Many health insurance plans in the individual market do not provide insurance coverage for medical costs related to pregnancy. A 2009 investigation by the National Women’s Law Center found that only 13 percent—of the more than 3,500 individual health insurance policies reviewed—provide maternity care. And, the costs related to pregnancy add up: as of 2007, the average expenses for maternity care—including nine months of prenatal care and three months of postpartum care for a delivery without complications—were over $10,000.

How can this be? Isn’t coverage for maternity care required under the Pregnancy Discrimination Act? Unfortunately, not—the Pregnancy Discrimination Act does not apply to individual policies. Thankfully, change is coming!

Beginning in 2014, health insurance companies will no longer be allowed to deny coverage to women because they are pregnant or to exclude maternity-related claims. Under the health care reform legislation signed into law by President Obama (the Affordable Care Act), health plans will be prohibited from turning away applicants because of preexisting conditions, including pregnancy. And insurance policies sold through state-based insurance exchanges, as well as new individual and small-group plans sold outside the exchanges, will be required to cover maternity care as an “essential health benefit.”