The Maternity Shell Game on Individual Health Insurance in Texas

Over the last week I have had several potential clients inquire about maternity coverage. My response was the same as it has been for the last few years for the health insurance consumer in Texas. There are no options. Yes, some health insurance companies on the individual market offer a tricked up benefit but all in all there is no true blue maternity benefit. These poor defenseless clients that called me had several agents telling them that they could provide all the maternity they would need, all said in an effort to get an application on a client. What desperate measures some agents will go to for an application. Do they not think the client will call them on the carpet on this? I guess the agents would just avoid the calls when they got confronted on it and hope the consumer would not file a complaint with the insurance commission. So basically this writing is more of a public service to inform the Texas health insurance consumer what their options are.

Back several years ago we had a few companies offering full maternity benefits in Texas. Things were great at that time, but since the State if Texas does not mandate maternity for individual policies, insurance companies were offering the benefit just for business share gain. It didn’t take long for the two big players that were offering maternity, Unicare and Blue Cross and Blue Shield to realize they were loosing massive amounts of money on this benefit. Unicare eliminated the benefit some ten years ago and Blue Cross followed step not long after.

Let’s explore why Unicare and Blue Cross eliminated the benefit and why no other major health insurance companies even offer full maternity. There is absolutely no way that a health insurance company in Texas can turn a profit on a benefit that is special in nature and requested by the client at time of sale. Dental and vision fall into the same quagmire as maternity. If the consumer request it they are going to use it, therefore, massive money loss for the health insurance company. A single male or a family in their fifties wont request maternity, only  females that are in their twenties will request it. Insurance is nothing more than high stakes gambling on who and what benefits you will use on a policy. that’s why each client must go through medical underwriting. Maternity is a guarantee of use benefit.

What is available? Well, few options but most all of them fall into the same category of “defined amout’ benefit, meaning, there is a set dollar amount they will pay for childbirth. always falling well short of the cost of delivering a child, not including all the doctor visits and exams required before the child is born. Lets look at one company that offers the defined benefit option. United Healthcare, for years they have offered the same maternity benefit. Years one and two amount to two thousand dollars in benefit escalating to six thousand dollars in benefit after the benefit has been in place for five or more years. In my view that’s not maternity. That’s nothing more that a dog and pony show. But Texas health insurance consumers actually purchase the benefit. I will not sell it, I won’t even present it. I don’t need the potential problems of a client forgetting that I told them of the limits.

Now, how does this so called maternity benefit affect the monthly premiums of the United Healthcare policy? They charge one hundred six dollars a month for this benefit to be added to a policy. That works out to twelve hundred seventy two dollars a year. Oh, you can not be pregnant until after the policy is issused so most likely a Texas health insurance consumer will pay on the benefit for about fifteen months before having a child. That works out to about sixteen hundred dollars paid for a two thousand dollar benefit. The math just does not work out for the benefit to be a wise choice for the Texas health insurance consumer.

Also of note, last I checked, my wife is presently pregnant with twins so I have checked, it will cost well over the amount of the benefit offered by the insurance companies providing maternity. Try the ten thousand dollar range to have a child in Texas, give or take a thousand or two. So some lousily two thousand dollar benefit is worthless.

The defined benefit option is far and away the most prevalent maternity option offered in the Texas health insurance market however, there are two other options being offered in Texas. One is a discount plan. Save your money, discount plans are a complete wast of money and one day soon I will write about that boondoggle. But the other option is offered through Assurant Health. They offer full coverage for normal routine maternity after a five or ten thousand dollar maternity deductible. So in reality if you take the five grand deductible you receive about half of the delivery covered. One big problem, Assurant is far and away the most expensive health insurance policy available in the Texas market place. In some cases they are double or triple the cost of normal quality coverage. So until Assurant Health brings their prices in line with the other PPO plans in Texas forget about them.

Now, under state mandates complication of pregnancy are covered on all major medical health insurance policies in Texas. So in the even the Texas consumer dosen’t have one of the tricked up maternity benefits they can still rest easy in knowing complications will be covered.

So where does that leave the Texas health insurance consumer? Simple, there is no maternity benefits available presently in the individual market. Until the Texas state legislature mandates this benefit young families are better off finding employment that offers group coverage where childbirth is offered. One day I hope this benefit will be available because I get real frustrated turning away clients due to this very request. Also, if you are in the market for an individual health insurance policy in Texas and the agent you are talking to says maternity is available, I suggest you question him extensively, ask for the benefit description in writing in the form of an outline of coverage before you move forward, otherwise the surprise at the hospital may not only be the newborn baby.