Baby boom: Is private health insurance necessary if you’re planning for pregnancy?
Planning to have a baby? Pregnancy is an exciting time but also a nerve-wracking one. There is so much to think about, not the least of which is where to have your baby.
Australians are fortunate to have access to good health care. And most women will give birth in a public hospital, where the charges will be limited. But many opt for private hospitals because they believe it will be a better pregnancy experience, including the promise of a private room after the birth.
It’s one of the reasons women who are thinking about getting pregnant take a closer look at private health insurance. This might mean updating their existing policy to cover pregnancy and birth. Or taking it out for the first time specifically for that reason.
But is private health insurance worth the cost to have a baby? Doesn’t the quality of public maternity hospitals negate the need to shell out all that money in the lead-up, particularly when you’re likely to come down to one income? Or are there hidden advantages for those who can afford to pay the premiums for pregnancy and birth cover? Let’s take a closer look.
Childbirth in Australia by the numbers
According to the Australian Bureau of Statistics, there are about 300,000 births on average each year. About 97 percent of women give birth in hospitals, with two-thirds of those in public hospitals, based on the Australian Institute of Health and Welfare's (AIHW) data.
The AIHW reported that mothers aged under 30 were more likely to give birth at public hospitals than those above 30; and the rate of caesareans has continued to rise, with one in three babies born by caesarean.
Private versus public hospitals for pregnancy
Whether you opt for the public or private system for your pregnancy and baby’s birth depends on your needs and preferences. But as a general guide here are some things to consider:
Level of care
You may select your obstetrician in the private system. You will be seen by this doctor throughout the pregnancy, including during labour and delivery. If they are not available when you are ready to deliver (for example, because they're with another patient), they will send a colleague instead.
In the public system, on the other hand, you are allocated a case worker, usually a midwife. This professional will provide care during your pregnancy and birth but may not be the same person throughout the process. It depends on who is on shift at the time of your appointments.
While both systems offer high-quality care, the private system offers continuity of carer, which you might prefer.
Accommodation
In the private system, you will generally be in a private room throughout your stay. It often have a double bed, and will typically stay for four to five days. You may have a shared room if you choose, or if the hospital is busy.
In the public system, you are more likely to share a room with other patients. And the length of stay is usually two days maximum if you had an uncomplicated birth.
Both systems offer good quality accommodation. But if you prefer the privacy of a private room, that may sway your decision about whether or not to go private.
Costs
If you choose the private route and you have appropriate private health insurance, most of your bills will be from your obstetrician. This is due to legal restrictions on private health insurance, which prevent them from covering out-of-hospital medical services such as consultations with specialists in their own clinic/rooms. Apart from that, specialists are free to charge whatever they want above the Medicare-scheduled fees.
If you opt for the public system, your pregnancy consultations, delivery, hospital stay, and even some post-natal care are all fully covered by Medicare. But some treatments delivered outside of the hospital, such as ultrasounds and scans, are not reimbursed.
In general, private hospitals are more expensive than public hospitals. This is because private hospitals are usually run as for-profit businesses, while public hospitals are typically funded by taxpayer dollars. Private hospitals also tend to have higher overhead costs, such as expensive equipment and luxurious facilities.
The cost of a private hospital delivery can range from $2,500 to $20,000, while the cost of a public hospital delivery is free if you have Medicare. If you have to pay for any reason – usually for scans, tests and medicines – it’s typically less than $2,000.
The common, specific hospital costs for having a baby include:
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- Room and board
- Labour and delivery
- Anesthesia
- Newborn care
What’s the cost of having a baby in Australia without Medicare?
If you don't have private health insurance or Medicare (though the latter covers most Australians), the cost of having a baby in Australia can be quite high. For example, the total cost of giving birth at The Royal Women's Hospital, the state-owned specialist hospital in Victoria, is $16,879. That is if your baby doesn't require admission or treatment.
The fee covers all your costs for hospital services for the mother. Also the antenatal care of up to six weeks if hospital care is required. It also includes medical, emergency, outpatient, inpatient, pathology, theatre, pharmacy and postnatal care in the home services, plus complex obstetric ultrasounds for high-risk pregnancies.
Should you give birth prematurely and require Neonate Intensive Care or Special Care Nursery for your baby, that will set you back an additional $4,293 per night or $2,971 per night, respectively.
Private health insurance to cover pregnancy and birth
If you would like private health insurance to cover your pregnancy and birth, buy a policy at least six months before you plan to conceive. This is because, in order to claim on birth-related procedures, you must first fulfil a one-year waiting period.
Also, make sure that you're getting a policy that covers all of your pregnancy and birth needs. Here are some things to look for in a good policy:
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- Prenatal care: Check to see if the policy covers the cost of doctors’ visits, ultrasounds, and other tests during pregnancy.
- Hospitalisation: Ensure the policy covers the cost of your hospital stay, as well as any complications that may arise during childbirth.
- Delivery: Some policies will cover the cost of home birth, while others will only cover the cost of a hospital delivery. Check what is and isn't covered.
- Newborn care: Many policies will cover the cost of your baby's stay in the hospital, as well as any tests or treatments that may be needed.
- Postnatal care: Some policies will cover the cost of postnatal visits to your doctor, as well as home nursing visits.
Keep in mind that private health insurance plans vary widely in terms of coverage and cost. Pregnancy cover for a NSW resident who has Medicare will cost at least $346 to $406 monthly and $366 to $426 for Victorian residents. Always compare policies and read the fine print before you choose one.
If you don’t have private health insurance, you can still choose to have your baby at a private hospital. But you will be responsible for the entire cost of your hospital stay. Which could be many thousands of dollars (see above).
Does having private health insurance cover the pregnancy costs before the delivery?
Most private health insurance plans such as Medibank, HCF and Bupa do not cover some of the prenatal fees. But if you’re a Medicare holder, visits to your GP can be claimed on Medicare. What’s covered instead, according to iSelect, is:
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- Hospital accommodation
- Theatre and labour ward fees
- Intensive care (during and after birth)
- Access to the special care nursery provided you are on a family or single parent cover
- Hospital-administered pharmaceuticals
- Medicare Benefit Schedule fees
- Hotel accommodation
In many cases, these expenses won't be covered by your pregnancy cover:
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- Certain specialist outpatient consultations
- Outpatient appointments (such as ultrasounds)
- Elements of IVF treatment
- The ‘gap’ on medical services incurred in hospital (such as a paediatric consultation)
- Pre-release check-ups
- Food for your partner
However, coverage varies widely from plan to plan, so it’s important to check with your insurer what is and isn’t covered so there aren’t any nasty bills when you get home.
Some insurers may also require you to use in-network providers, which could limit your choices of doctors and hospitals.
Where can you go to compare private health policies?
There are a number of ways to compare policies in Australia:
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- Use an online comparison tool, like privatehealth.gov.au
- Call the insurers directly and ask for quotes
- Speak to a broker who can help you find the right policy
When you're comparing policies, make sure you take into account the cost of premiums, excesses, and any exclusions or limitations. Also, learn how to get the most out of your private health policy.
You should also check to see if the policy is portable, which means you can take it with you if you switch jobs or move interstate.
Complaints about pregnancy care in public and private systems
Hidden costs
According to Associate Professor Emily Callander of Monash University, private hospital expenses are frequently hidden behind a veil of secrecy. Fees charged by private practitioners are not controlled, but Medicare's reimbursement scheme for patient costs is fixed.
“There can be large gaps between rebate amounts and practitioner charges,” Prof. Callander says. “The fees involved in birthing are hugely variable, and there is no way of accounting and identifying what these variations might be.”
The hidden out-of-pocket costs are usually:
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- Private obstetrician fees
- Ultrasounds
- Pathology tests
- Fees for medical staff and specialists
- Post-natal care
- Special care nursery
The largest average growth in out-of-pocket costs was with private obstetrician charges, increasing by more than 1000 percent from 1992 to 2017.
Unnecessary caesarean births
While there are some instances where a C-section or caesarean is medically necessary, many experts believe that the procedure is being performed far more often than necessary in private hospitals.
A recent study by the University of Technology Sydney looked at almost 300,000 births and found that mothers who gave birth in the private system were more likely to have a C-section – even if they didn’t really want or need one. The women in the study had low-risk pregnancies until the start of labour, and they did not intend to have a caesarean.
The study’s authors believe that this trend is driven by a combination of factors, including convenience, financial incentives, and pressure from obstetricians.
Limited facilities
While private hospitals may offer a more comfortable stay for patients, they are not always able to provide the same level of care as public hospitals.
Private hospitals often have smaller staff and fewer resources, which can limit their ability to provide complex or intensive care. In addition, private hospitals may not have access to the same level of technology as public hospitals.
If you go into preterm labour, for example, or if you or your baby have significant health issues, you might be transferred to a public hospital with a neonatal intensive care unit (NICU) or a special care nursery (SCN) for premature or sick babies. Some private hospitals offer SCNs, but they are not always equipped with NICUs.
Complications after childbirth
Mackay Base Hospital's obstetrics department is facing scrutiny after complaints from women about complications following caesareans at the facility. There have been suggestions of patient harm, and an independent review has been ordered to investigate the matter.
In one case, a 27-year-old who had given birth at the hospital said she was unable to walk up and down stairs upon returning home with her new infant, claiming that she had become severely weakened in her left leg.
Another required emergency surgery to repair her bladder, which was allegedly cut in half with a scalpel, after she delivered her daughter via caesarean at 34 weeks.
Others complained that doctors and medical staff in the hospital were dismissive of their problems.
If the hospital fails to deliver…
If you have a complaint about the standard of care you received at a hospital, you should first talk to the hospital and/or your doctor. The quickest and most successful way of resolving a complaint is often to communicate with them directly.
If you're not satisfied with the outcome, you can contact the Health Complaints Commissioner. You can also lodge a complaint with the Australian Health Practitioner Regulation Agency (AHPRA) if you believe that a health practitioner has behaved inappropriately.
Making the right decision for you
In the end, whether you go public or private for your pregnancy and birth is very much a personal choice based on your circumstances and wishes.
It’s only natural that you want to give your baby the best start to life. But that doesn’t necessarily mean you should sign up for private health insurance, or take out extra cover.
Australia’s public maternity hospitals generally have a great reputation. And, as mentioned above, if you have complications you may be transferred to one of them anyway.
So unless you really do want the perks of a more luxurious private room or want to ensure that you get your obstetrician of choice, you might be better off saving those premium dollars for decorating the baby’s nursery - or starting their university fund.
If you do decide to take out private health insurance to prepare for your baby, and you feel you’re not getting what you paid for, please let us know and we’ll handle it.
