The Cost of Being Born

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More than 4 million babies are born in the U.S. each year, which not only means a lot of diapers, but also that there is a huge chunk of change being paid out for medical expenses even before the big delivery.

According to the Agency for Healthcare Research and Quality (AHRQ), a division of the U.S. Department of Health and Human Services, just the cost of having a baby – including prenatal care, prescription medication and delivery – costs about $7,600.

These figures are based on data collected in 2007, the most recent set of numbers available, but the assumption is that those costs have only increased in the past three years.

According to the study, the cost of having a baby differs slightly from women who have private insurance to those who are on Medicaid. Prenatal care was about the same cost, at about $2,000 per patient.

Approximately 23% of women have some sort of prescription drug expenses associated with their pregnancy, averaging $640 per person. Three quarters of expenses are for nutritional supplements such as prenatal vitamins.

Women who are privately insured are charged on average $6,520 for inpatient delivery, while patients on Medicaid are typically charged an average of $4,577. There are ways to cut your costs, however.

Don’t be Afraid to Negotiate

Fatima Mehdikarimi, founder of ShoppingQueen.com, helps others find deals, but as a self-employed entrepreneur, she opted out of the maternity clause in her private health insurance coverage.

“And then we found out: Oops, I’m pregnant,” Mehdikarimi said .

An experienced negotiator and deal finder, she decided to try to negotiate with her doctors and hospital on the cost of delivering her baby. “This was my second baby, so there were many things I didn’t feel I needed such as birthing classes,” Mehdikarimi said. “Keep in mind that savings thousands takes many hours of negotiation and research.”

Mehdikarimi said she used a reverse pyramid model, tackling the largest expenses first. She had used a hospital in her city of Atlanta, which has a high rate of births per year, to deliver her first baby.

Mehdikarimi said the concept of supply and demand works in the medical field as well. “When I talked to this hospital, they had such a demand they didn’t need to negotiate with me,” she said. “I went to a new hospital that was trying to build its patients and they were willing to negotiate.”

She was able to negotiate a rate of $3,000 for the hospital delivery, which is significantly lower than the national average cost. Mehdikarimi didn’t feel as if the quality of her care suffered either, and she was in the hospital for the average maternity stay of two days and two nights.

Her efforts also paid off with her doctor, anesthesiologist, the lab that handled her tests and blood work and the facility that handled her  ultrasound. At the end of the pregnancy and delivery, Mehdikarimi paid less than $7,000 for the birth of her baby.

“People are afraid to negotiate with doctors and hospitals,” said Mehdikarimi, who was even able to negotiate with her doctor based on the fact that the birth only took 10 minutes. “I asked her for a further discount because I didn’t use as much of her time as we originally negotiated.”

Mehdikarimi said the key is to know the system. “Know that every person who touches you will be sending a separate bill,” Mehdikarimi said. “There is a separate charge for the anesthesiologist, the lab, the hospital, the ultrasound, the doctor and any specialist you may see.”

Mehdikarimi had no prescription drug expenses and said she purchased her prenatal vitamins in bulk at a discount warehouse store.

However, she also had an uncomplicated pregnancy, and it wasn’t her first, which helped reduce costs. “I declined the HIV test because I told them I had one during my first pregnancy just two years before and I had only been with my husband,” she said. “We also only had one ultrasound because for us, any result wouldn’t have resulted in a terminated pregnancy.”

What If There Are Complications?

Some studies suggest that up to 10% of women in the U.S. experience infertility problems. Of those, only 25% of couples who need help get it, according to Dr. Elan Simckes, a fertility specialist and founder of The Fertility Partnership near St. Louis in St. Peters, Mo.

Simckes quoted a study done in Europe showing that the average cost of fertility treatments in the U.S. is $13,000-$14,000 per round, while costs in the rest of the western world are just more than $5,000. Simckes said the only country close to the U.S. is Canada, where costs average about $8,000 per round.

Simckes, who has been in the field for more than two decades, said most insurance companies in a majority of states will not cover the costs of fertility treatments. “It’s a very expensive process and there are no guarantees, we are basically just throwing darts at a board,” Simckes said.

There are ways to save on the costs. The industry has sparked a whole subculture of “IVF tourists” who travel to countries like the Czech Republic, where the procedure is less expensive. Simckes’ clinic also offers the service and medications for an average of just more than $8,000 per treatment. “I felt it was too expensive and my idea was to found a clinic that provides the quality at a more reasonable price,” Simckes said.

The other major factor that can add to the cost of having a baby is if there are complications, such as premature birth.

Dr. Jennifer Gunter, a gynecologist at Kaiser Permanente and author of The Preemie Primer, has experienced first-hand the cost of having two boys, both born 14 weeks early. She estimates that with all of the medical costs and special services such as occupational, physical, massage and feeding therapy, as well as the cost of relocating her family from the high altitude of Colorado, where her sons had trouble breathing, the total costs have exceeded $1 million.

“The biggest thing is that no one tells parents how much it will cost if you have a premature baby in the [intensive care unit],” said Gunter. “I was fortunate I had an HMO and my co-pay was the same if they stayed for one week or one month.”

Gunter said it’s difficult to determine an average cost for a premature baby to be in the ICU because each case is different, but it could run from $28,000 for a few days to weeks to more than $1 million if the baby has to stay as many as six months.

In addition to therapy expenses once a baby is released from the hospital, they may need regular oxygen treatment, which could cost $200 per month and a variety of medications. Visits to eye, lung, heart and gastrointestinal specialists may also be required.

“The average preemie has 16 visits to the doctor in the first year,” said Gunter. “Even for those who have insurance with co-pays, the costs can add up.”

The best advice is to make sure you know what your insurance covers and if there are lifetime limits, to check them out and be prepared before that strip turns pink.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.

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