Money Hacks For Growing Your Family (Part 1: Pregnancy)
If you are pregnant, congratulations!! What an exciting and overwhelming time.
If you’ve been pregnant before, you may or may not have figured out what you’ll do the next time around to try to save money. If this is your first pregnancy, you are likely clueless…just like I was!
I’m currently 8.5 months pregnant with my first baby, and to say that I’ve researched ad nauseam ways to save money during my pregnancy would be the understatement of the century. To save you a ton of time and lots of headaches, I’ve put together a three-part series of guidelines to help you find hacks to save you money during pregnancy, delivery, and life after delivery. Enjoy!
The good and the bad part about saving money during your pregnancy is that most of it has to do with insurance. Now, before you skip ahead to part two, take a moment to recognize that insurance is just about one of the most confusing things ever. Whoever thought it was okay to throw people out into the “real world” without any education or exposure to how insurance worked deserves cruel and unusual punishment. (Just kidding…kind of.)
I’ve put in many hours of calls, research, emails, and spreadsheet comparisons to break down insurance for you as simply as possible.
1. Get to know your insurance coverage.
You will want to spend some time reviewing your benefits to understand what is and what isn’t covered as part of your health insurance, AND you have to advocate for yourself, because no one is going to tell you if you overpay for a service or procedure.
They will gladly take your money and run. Sad, but true.
In fact, I thought I was smart to prepay for all of my prenatal visits with my HSA, because I didn’t want any debt. Only after many phone calls with my insurance and reviewing my benefits did I realize that my prenatal visits were covered by my insurance at 100%. It took me 6 months to get refunded that $1,000 to my HSA!
2. Actually review your EOB’s (Explanation of Benefits) & audit your bills against them.
Whenever you have a medical service or procedure, your insurance company will send you an EOB that typically says in bold font on the top of the page “This is not a bill.” This is your explanation of benefits that shows what procedures and services are covered under your insurance and what your financial responsibility is.
Make sure you review these carefully for errors, because insurance companies and/or medical offices will frequently make billing and coding mistakes.
If you blindly pay whatever bills are sent to you without first checking your coverage, you could cost yourself big!
3. Know your out-of-pocket max.
When I first got pregnant, I asked the question “How much will this cost me?” so many times until I realized I was going to have to figure it out myself.
The answer is that it all depends. Super helpful, right?!
To understand how much you’ll be responsible to pay for your pregnancy (prenatals, ultrasounds, tests, etc.) and your delivery, you need to revisit your insurance plan (see pregnancy tip #1).
Within a calendar year, the maximum amount that you will pay for all pregnancy and delivery-related costs will be your out-of-pocket max. That means that if you have a $5,000 out-of-pocket max, but your pregnancy overlaps into two calendar years, you could end up paying up to $10,000, which would be the amount that you need to save for medical expenses.
If you have a high-deductible health plan, I recommend saving as much of your out-of-pocket max as possible into your HSA (Health Savings Account), as this will save you whatever your tax rate is, since you put the money in pre-tax.
4. Understand in-network vs. out-of-network.
In early pregnancy, you’ll need to make sure that 1) your practice and 2) your provider are both in-network with your insurance. Call your insurance company to verify that both are in-network. (Pro tip: if you have a midwife instead of an OB, they will often not be listed in your in-network providers, but this doesn’t mean they aren’t in your insurance network. Often, midwives will bill under an OB. Call the medical practice to see if your midwife bills under an OB and which one. Then call your insurance company to make sure that OB is in-network.)
5. Save extra cash above your medical expenses for necessities.
You’ll want to save extra money above-and-beyond your out-of-pocket max to cover essentials like nursery furniture, stroller, baby essentials, childcare deposits, etc.
Congratulations! You now understand insurance just enough to be dangerous (i.e., save you a boatload!)