Prior to 2014, women who purchased their own health insurance were often completely out of luck if they wanted to have coverage for maternity. In 2013, the National Women’s Law Center reported that just 12 percent of individual market plans included maternity benefits. And that was despite the fact that nine states required maternity benefits to be included on all individual plans.
In the rest of the states, maternity coverage in the individual market was extremely rare, and if it did exist, it was generally in the form of an expensive rider that could be added to a plan, usually with a waiting period. Yet even on plans that excluded maternity coverage, women were charged premiums that were at least 30 percent higher than those charged to men for the same coverage.
Before Obamacare made coverage guaranteed issue, pregnancy itself was also considered a pre-existing condition that would prevent an expectant parent — male or female — from obtaining coverage in all but five states. And many individual health insurance carriers considered a previous cesarean section to be a reason to decline an application or charge a higher initial premium. (in Maine, Massachusetts, New Jersey, New York, and Vermont, state regulations prevented carriers from using medical underwriting to determine eligibility for coverage, long before this became the norm under the ACA).
Obamacare changes everything
The ACA has been a game-changer for individual health insurance, and maternity coverage is one of the areas where the changes are most pronounced. Maternity care is one of the ten essential health benefits that must be included on all new individual and small group policies. An expectant parent can now obtain coverage in every state during open enrollment or during a special enrollment period triggered by a qualifying event. And women are no longer charged higher premiums than men, despite the fact that every new major medical policy — both in and out of the exchanges — includes maternity coverage.
Even before the ACA, maternity coverage was available on most employer-sponsored group plans, thanks to the 1978 Pregnancy Discrimination Act. The Act mandates that if an employer with 15 or more employees opts to provide health insurance, the coverage must include maternity benefits. And in nearly 40 percent of the states, there were regulations that required small group plans to include maternity benefits, even if the employer had fewer than 15 employees.
But the ACA has filled in the gaps. In every state, new small-group plans must include maternity benefits. (Small employers with fewer than 50 employees are not required to offer coverage at all under the ACA, but if they do, it must include maternity benefits.)
Taken by surprise
Before the ACA reformed the individual insurance landscape, some people with individual health insurance weren’t aware that their plans didn’t cover maternity – until they became pregnant. And there were often misconceptions about the ability to purchase additional coverage, with some insureds believing that as long as they maintained continuous coverage, they would be able to purchase coverage that included maternity if and when they needed it. But that was not the case.
According to WebMD, in 2012, the average cost of an uncomplicated hospital delivery was over $10,000, and climbed to almost $18,000 for an uncomplicated cesarean delivery – plus the cost of pre-natal care. That meant that parents with individual health insurance often went home from the hospital with a significant bill in addition to their new bundle of joy.
There are still individual and small-group plans that don’t include maternity care, because grandmothered and grandfathered plans are still in existence. Grandmothered plans are allowed to remain in force until the end of 2021 (and that may be extended; the federal government has issued extensions every year since 2014), although their continued existence is at the discretion of each state and the insurers that offer plans in a given state, so some states haven’t had grandmothered plans for years, or never had them at all. And the number of grandfathered plans is steadily declining, since those are plans that were in force as of March 2010 and have remained largely unchanged ever since. But maternity coverage is included in all individual and small-group plans with original effective dates of January 1, 2014 or later.
It’s true that some new plans have relatively high out-of-pocket costs, but even the lowest-cost Bronze plans have a maximum individual out-of-pocket limit of $8,150 in 2020 ($8,550 in 2021), as long as the medical services are provided in-network. And som
Preventive care is covered with no cost-sharing on plans that were sold or renewed after September 23, 2010, and additional woman-specific preventive care was added to plans that were sold or renewed after August 1, 2012. So at this point, all grandmothered plans include free preventive care, as well as all new plans that are fully ACA-compliant.
But you still have to plan ahead
In order to have maternity coverage, you must have an in-force health insurance policy that’s ACA-compliant (or one that pre-dates 2014 and happens to have maternity coverage included – but those are rare in the individual market). And while medical underwriting is no longer used to determine eligibility for coverage – which means that being pregnant won’t cause an application to be declined – there’s only a short window each year during which you can enroll in a health plan. In most states, it runs from November 1 to December 15, with coverage effective January 1, although there are several state-run exchanges that offer longer enrollment periods.
In New York, a law took effect in 2016 making pregnancy a qualifying event that triggers a special enrollment period (special enrollment periods allow people to obtain coverage outside the normal enrollment period). So women in New York who become pregnant outside of open enrollment have the opportunity to enroll in coverage for the first time or to switch plans, with an effective date of the first of the month in which the pregnancy is confirmed by a health care provider. A similar law took effect in Connecticut in 2019 and in DC as of 2020.
Advocates have been pushing to make pregnancy a qualifying event in every state. HHS has considered it, but clarified in early 2015 that they had decided against making pregnancy a qualifying event. It’s possible, however, that some of the other state-run exchanges could implement a special enrollment period for pregnant women in future years.
But for now, it’s important to keep in mind that while all ACA-compliant plans cover maternity, you cannot go uninsured and simply plan to enroll in a policy if and when you get pregnant. And if you have a grandmothered or grandfathered plan that doesn’t include maternity coverage, you cannot switch to a plan with maternity if you get pregnant – you’d have to wait until the next open enrollment, which only comes around once a year, unless you experience a qualifying event.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.