"Preparing for a new baby means assembling a crib, installing a car seat, and washing all those impossibly small outfits. But something else you should consider? Making sure your little one is covered under your family’s health insurance.
Open enrollment for health benefits usually takes place in the fall, with coverage beginning January 1. That means that if you’re expecting a baby sometime next year, now’s the time to lock down your health insurance coverage. It’s important to consider your growing family’s health needs during maternity and postpartum periods. That means considering the cost of maternity care for mom, plus expected costs of birth and any post-birth care in your state, including out-of-pocket costs.
Overwhelmed? We’ve got you. Read on for everything expectant parents need to know during open enrollment.
Understanding Your Maternity and Newborn Coverage Needs
So, what’s included in maternity coverage anyway? While it varies by insurance provider, maternity care covers prenatal care, including checkups, lab work, and tests for common pregnancy issues like gestational diabetes. It also covers labor and delivery, including an epidural (as long as your anesthesiologist is in-network, that is). The average cost of an in-network vaginal birth in the United States is $14,768, with out-of-pocket costs at about $2,655. C-sections cost even more, at $26,280, with an out-of-pocket cost of $3,214.
Knowing your out-of-pocket maximum is another important factor to consider. The out-of-pocket maximum is crucial because it caps your expenses for covered services. We all know childbirth can be expensive, so knowing the maximum you could owe is a smart financial move.
Post-birth, maternity coverage includes breastfeeding support, newborn care, and birth control. Even if you don’t think you’ll use all of these things, it’s important to consider a wide-reaching policy. I remember not thinking about whether I’d need breastfeeding help after my first son was born. When I did, I was so incredibly grateful that I had breastfeeding coverage—it was one less thing to worry about.
Extra Benefits to Consider
Postpartum mental health coverage is another important factor to consider when choosing a health plan. One in five women experience depression, anxiety, or substance abuse issues postpartum (I’m looking at you, mommy wine culture!). So even if you think it won’t happen to you, it’s better to be prepared in case it does. Be sure to select a policy that covers access to mental health professionals, postpartum checkups that screen for depression and anxiety, plus coverage for therapy and medication.
Whether your policy has telehealth for new parents is another important question to ask your insurance provider. When I had a raging case of mastitis with my second, the telehealth option for new parents saved me. The entire process took less than 30 minutes, from making the appointment to seeing a provider to getting a prescription called in. For someone who was struggling to make time to take a shower, it was a godsend.
Adding Your Newborn to Your Health Plan
So now that you know what maternity coverage entails, what type of coverage you need, and how much your out-of-pocket maximum is, it’s time to add your impending bundle of joy to your plan. But how—and when—do you do that?
You’ll add your newborn to your health plan after they are born. (Before the baby’s birth, the health coverage needed for prenatal care and labor and delivery will be covered under mom.) Once your baby is born, call your health insurance company to add your baby, and be sure to have his or her birth certificate and your existing policy information handy. And don’t worry, you have a 60-day grace period to add your baby from their birthdate to your policy.
High-deductible vs. Low-deductible Plans for Expectant Parents
You’ll also want to choose the best insurance for having a baby. High-deductible health plans (HDHP) have lower monthly premiums, but higher deductibles—or the amount you pay before your health benefits start. Many HDHPs completely cover preventative coverage, have a catastrophic limit on what you’ll pay out of pocket, and offer tax advantages, such as a Health Savings Account (HSA) or Flexible Spending Account (FSA). A high deductible plan for pregnancy means that you’ll likely pay your full out of pocket limit, so be sure to plan accordingly.
Low-deductible plans, or traditional health insurance plans, typically have higher monthly premiums, but lower deductibles. That means that you’ll pay less out of pocket before your health insurance kicks in.
Leveraging HSAs and FSAs to Cover Maternity Expenses
If you enroll in a HDHP, you’ll also have access to an HSA or FSA to help cover medical costs. There are tax-advantaged accounts that allow you to pay for eligible medical expenses.
HSAs offer tax deductible contributions, tax-free growth and withdrawals for eligible medical expenses, plus you can roll over your unused funds from year-to-year. FSAs offer tax-free contributions, which lowers your taxable income. You can also use those funds to pay for eligible medical expenses. This means that with either an HSA or FSA, you can use pre-tax dollars to pay for prenatal or postnatal care. You can also use your HSA or FSA to pay for approved baby gear, another plus.
Choosing In-network Providers for Maternity Care
There’s nothing worse than meeting a doctor or OB-GYN who you absolutely love only to find out—surprise!—they aren’t in-network. When choosing providers for your prenatal and postnatal care, plus your baby’s pediatrician, it’s important to choose in-network providers to avoid out-of-network charges. You can check your provider’s website for a list of in-network providers.
It’s also important to consider coverage for various birthing options, such as using a midwife, birth center, or doula. Most states cover midwives and birth centers (assuming they’re in-network). It’s an option worth considering. When I gave birth to my second baby, he was delivered by a midwife, and it made all the difference. Doulas are typically not covered and will usually cost you out-of-pocket.
Adjusting Life and Short-Term Disability Insurance
A recent study found 37 percent of parents with children under 18 don’t have life insurance. As much as no parent wants to think about it, supporting your family in the off chance something happens to you is so incredibly important, especially when you have young children.
Both parents should have life insurance, experts say. While the primary earner may want to have a larger policy, it’s also important for a stay-at-home parent to have coverage to cover things like childcare and even college tuition.
You will either opt for term life insurance, which is cheaper but only for a set amount of time, like five to 30 years. Whole life insurance, while more expensive, provides lifelong coverage. If you already have life insurance, you may want to consider upping your coverage when adding a new family member.
Disability insurance is another factor to consider when having a baby. It can help pad income if you are unable to work due to pregnancy, birth, or recovery. You can opt for short-term disability, which covers between three and six months, or long-term disability coverage, which can last for a year or more.
Childcare Benefits for New Parents
According to a 2023 report by the non-profit Child Care Aware of America, childcare costs more than housing in most states. The cost of childcare was also an issue posed to candidates for the first time in this year’s U.S. election. While it’s still unclear how the next administration will address the cost of childcare, parents expecting a baby next year can consider a Dependent Care FSA (DCFSA).
A DCFSA is an account specifically earmarked to help offset childcare costs. Contributions are made pre-tax, plus it can lower your taxable income. For 2025, the IRS DCFSA limit is a minimum contribution of $100 and a maximum of $5,000.
Preparing for a new baby isn’t all diapers and onesies. It’s important to carefully review your benefits options during open enrollment to find the best health insurance for pregnancy and ensure a financially secure and well-supported year for your growing family.
Proactively planning for health, financial and family support needs is the best way to ensure your little one—and you—have the best first year possible.
Rachel Morgan Cautero, Contributing Writer
Rachel is a full-time freelance writer based in Ponte Vedra, Florida. When she’s not busy wrangling a toddler, preschooler, and one very stubborn French bulldog, she’s writing on all things personal finance and parenting. Her work has appeared in The Atlantic, Forbes, Parents, Nerdwallet, The Balance, Yahoo Finance, Truly Mama, SmartAsset, HerMoney, and DailyWorth.