Financial Tips for New Parents - #3 Review Medical Insurance Coverage

With so much going on in the months leading up to the arrival of your baby, the last thing on your mind is probably health insurance. However, this is actually a very important financial decision that should be considered even prior to the pregnancy.

If you have specific doctors that you'd prefer to see during your pregnancy, or a birth plan that you'd like to follow (for example, home birth vs. birthing center vs. hospital), you may want to review the insurance plans available through your or your spouse's employers to make sure that the plan you choose will cover the medical decisions that you make. Generally, you can only change your insurance coverage once a year, so take the time to do your homework. If your employer offers multiple plans, see if they have an online comparison tool that shows you how much your out of pocket costs will be in various scenarios. Make sure you understand the costs you're responsible for, such as premiums, deductibles, co-insurance and co-pays. If both spouses work, does it make sense for you to be covered separately or together under one plan? When the baby arrives, which plan should he or she be added as a dependent under? Read a summary description of what services the plans cover. Look up the doctors that you want to see and confirm that they are in the plan's network. 

A few months prior to your due date, contact your insurance company or HR department and ask what documents you need to provide in order to add your child as a dependent. It's best to have these documents prepared in advance as you only have a certain number of days after the baby is born to submit them. From my own experience, and I think most parents will attest to this, you'll be so preoccupied with your newborn and adjusting to your new schedule that it's best to prepare as much as you can beforehand. 

During the first year of your child's life, it will feel like you're constantly going to the doctor's office because there are so many well visits to schedule. An important lesson I learned is that we need to understand how many well visits the insurance plan covers. My son's pediatrician had a different vaccination schedule from most other offices, so they used up all the well visits that our insurance covered before my son's first birthday. I didn't know it at the time, but they continued to bill for well visits and when the insurance company came back and said we've already met the limit for the year, we ended up having to pay out of pocket for the remaining visits. 

It may seem obvious, but it's crucial that you do your research and understand the medical insurance coverage for you and your child before you need to use it.