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Don't have your baby in January
When deductibles screw over new parents.
Today’s interview is part one of two posts looking at how the timing of your child’s birth, which is otherwise meant to be a beautiful and incredible milestone that you will celebrate for the rest of your life, can be expensive. Michael Kimball, the subject of our story today, owed hundreds of dollars because his daughter was born two weeks into January, after his plan reset for the year. Part two, which I’ll send on Wednesday, will tell the story of a man whose wife did give birth in December—and they still got screwed by insurance somehow.
It’s not news that the resetting of deductibles, and other annual “accumulator” mechanisms, shapes people’s use of healthcare. Many hospitals see a rush of patients scheduling elective procedures in December, when they may have already spent most of their deductible, before it resets in January. But for most parents, trying to schedule their baby’s birth for December is difficult, if not impossible. You’ve got to be pretty lucky to get pregnant the very first month you try—and for most people, like Michael, it just isn’t at the top of parents’ minds. Michael and his wife had been trying for a while and receiving fertility treatment, and then it just happened. Michael told me it was “frustrating” that the fact she would be born in January, after their plan reset, was “one of the first things” he said out loud when he found out his wife was pregnant. (The same thing happened with their first baby. Double bad luck.) The deductible is just one of those arbitrary features of the American health financing system that are stubbornly not taken into account by human bodies when they need medical care. Hearts and kidneys do not pay attention to calendars or insurance plans when they fail, and babies will come when babies come.
So luck can determine whether or not you pay hundreds of dollars for the birth of your baby—but that isn’t where the opportunities to owe more end.
One of the problems with the United States having more insurance plans than there are atoms in the universe, each with different benefit levels and negotiated payment rates, is that it introduces many more opportunities for things to go wrong. For example, when I switched from a Silver plan to a Gold plan at my job a few years ago, I was asked to pay hundreds of dollars towards my deductible at my first neurology appointment of the year—even though I no longer had a deductible, so I was pretty sure I didn’t owe anything. But the receptionist was there, demanding the payment and standing between me and my doctor, so I paid up. I called the billing department later and found that they hadn’t updated their system to reflect my new deductible, so they refunded me. (Good thing I called; not everyone would have time to do that.)
All of this is very stupid. It’s extremely inefficient, not to mention expensive and onerous, to have entire departments full of people processing payments from insurance plans and patients at every single medical establishment in America. Each little opening for the healthcare industry to thrust their hands through and grab some cash is another little opening for something to go wrong and a patient to get billed when they shouldn’t be. Coinsurance, deductibles, copays—all of these are programs in the machine that can get a huge wrench thrown in them by human error, bad data, or unforeseen events.
This sort of thing is how Michael ended up being asked for $1280.28 at 5.30 in the morning on the day his wife gave birth. He paid up, due to wanting to get his wife into the hospital so she could give birth to her baby!!! After the birth, he kept getting bills that didn’t reflect that he had paid it, or shed any light on why he owed that amount.
One of the itemized bills he eventually received showed that he owed $885.85 after insurance payments—$585.85 in coinsurance, $250 for the deductible, and $50 for a copay. Straightforward enough. But what about the other $394.43? Where did that come from? It’s unclear, even now. All of this is also complicated by the fact that some charges are for the mother and some are for the baby; Michael got two separate itemized statements from the hospital, one for each of them. The $885.85 was for his wife’s account. On his baby’s statement, it shows his payment of $394.43, but only a coinsurance of $119.36 and a copay of $50. So where did they get $394.43 from? And why was he still getting bills for this amount when that’s what he paid for at 5.30 in the morning when his wife was in labor?
It took weeks of emails, calls, and requests for itemized bills to finally get the hospital to refund him the $394.43, and acknowledge that the other few hundred had been paid. Weirdly, he told me “it was a private Facebook message from me to the hospital that finally got the hospital to respond — not emails, phone calls or tweets.” So there’s a possible tip for future parents: Keep your Facebook until after the bills are paid.
Some of these hundreds of dollars in charges would have been avoided had Michael’s baby been born a couple weeks earlier; he wouldn’t have owed any of the $250 deductible, and maybe less in coinsurance, too. (Compared to most insurance, his plan is very good; others in his situation could have owed thousands.) But whenever you have your baby, you’re probably going to get some confusing bills, and maybe some that you shouldn’t owe at all. Just what you want when you have a new child.
This interview, conducted in February, has been edited and condensed.
Michael Kimball: I want to preface everything literally by saying I also am an upper-middle-class white dude with everything going well for me. And so I'm very sensitive to, the world hears all of our grievances already, you know what I mean? I don't want to act like I'm some mega-victim or anything. But also, I just think this sucks because this is what the good life is in America with our healthcare. That sucks.
So we have two kids. My wife's name is Susanne, and she's also 37. And we have two kids, and both of our kids were born in January, which is funny. We were both born in late December, right around Christmas. Our first child was born January 6, 2017. Our most recent and last child was born January 14 of this year. The frustration is just—you basically paid all your deductibles and stuff, and then all of a sudden everything resets. And if your baby is born in December, it's just a huge financial advantage compared to being born early in the next year. It's just so stark, because our deductibles zero out.
And then we have the second, more common—it happens to everybody in every healthcare scenario—situation right now, where it's a month later and we still have no idea how much it cost! And it was a planned procedure. We've had a lot of difficulty. We had to pay money on the spot when we showed up to the hospital for the Cesarean. We had to pay $1,200, and then they sent us bills.
We show up [and] they're like, 'Okay, you owe us $1,200,' and we pay it. I paid it with my Flexible Spending Account card. And now I have to provide them documentation— except the only documentation I have isn't sufficient, and it doesn't match up within my Explanation of Benefits or hospital bills, because none of my EOBs or hospital bills show that we paid $1,200. I can't even interpret the billing that they sent me, and then I need something so I can show the FSA people. It also makes me think: what happens if you show up to the hospital and you don't have a credit card with $1,200 worth of room, or an FSA, or whatever? Do you just go to the emergency room and have the baby there?
Sick Note: So when they asked you for the $1,200, did they say, 'This is a copay,' or, 'This is coinsurance,' or anything? Or were they just like, 'That'll be $1,200.'
Michael Kimball: So what's frustrating—and again, it was like 5:30 in the morning. It literally was 5:30 in the morning. We woke up at 4:45 am and we got there at 5:30 am for the 7:30 am planned Cesarean. But I think they showed me an estimate thing for what it paid for, and I was like, ‘Whatever. Whatever I've gotta pay, you know, here's the card.' But I can't find it if they showed it to me and I kept it, so all I have is the one receipt there. And the stuff in the portal doesn't seem to reflect it. So I think that they did, but I can't remember, and if so, I don't have it. I'm pretty sure I didn't lose it because I have all the other stuff that they gave me that day, but not that.
Sick Note: Sure. And also, how could you be expected to think about that stuff when your wife is having a baby?
Michael Kimball: Yeah! I forgot about it. When we had our baby four years ago, we walked in for our 36-week appointment, and my wife's blood pressure was high, and so they were like, 'You're having a baby today.' And so we were like, 'Oh my God.' So all that happened that day. We had to have a Cesarean because we couldn't get the baby turned, she was transverse.
But anyway, after all that happened, we had people up in our hospital room trying to get money from us and asking us all these financial questions. So I remembered that last time and kind of just assumed, I forgot that the reason why they did that was because they couldn't avoid asking me for it beforehand. It was an emergency, I guess. And so it just sort of never occurred to me. It was 5:30 in the morning and I was bleary-eyed and I was like, 'Oh. Yeah, I mean, whatever, here we are.' You know, we're like checking in in this little room after they took our temperature because it's COVID stuff. And yeah, just paid it and walked in.
Sick Note: It's like a cover charge for a hospital.
Michael Kimball: Yeah. And then I guess apparently, like you saw in the very limited email exchange that we had with them, we said, 'Hey, we prepaid money,' and they sent it like, 'Oh, it turns out that we owe you a refund.' But I haven't gotten anything. That second bill, you'll see two bills for about the same amount in the emails that I sent you. The second one was mailed to us after that conversation. I haven't gone back and checked the date. The date on the bill might be before we had that conversation and they just mailed it to us afterwards, but I still have not gotten any communication from them on the $1,200 and how much they owe us, and then also I don't know, I need to square it with my FSA account, which I paid it with. And again, I think that—I don't know for sure, because it's America and I don't know how this shit works—but I think my out-of-pocket costs would have been almost zero if the baby had been born in late December instead of whatever they are now.
Sick Note: It must feel kind of frustrating to have gone through pretty much exactly the same thing twice: to have a kid born in January and be hit with a deductible and whatever other bullshit fees that they hit you with then, and then for it to just happen at exactly the same time.
Michael Kimball: It is frustrating. We had joked about it before, like, 'Let's try to have a baby not in January this time to make it a little cheaper.' But we had a little bit of a fertility journey. It took us about a year and a half to get pregnant. After about a year, we started visiting a fertility specialist. And we had just made a kind of painful decision to stop seeing the fertility specialist at the very beginning of the pandemic, about a year ago in March. And then she got pregnant the next month. So it ended up being, again, the perfectly imperfect time. Obviously, we know how babies are made. We weren't paying attention to what day it was and all that kind of stuff anymore. And then she just got pregnant. But yeah, it's so frustrating that it's one of the first things that I said out loud. I was like, 'Oh my God, she's gonna be born in January again, when the deductibles roll over.'
And then the other thing, obviously, is the tax break you don't get. If she was born in December, we could have had the child tax deduction for all of 2020. But she was born January. I need to ask my parents; I wonder if 'deductible' was even a word in late December 1983, when we were born. They've talked about the tax thing before, but I've never heard them say anything about deductibles.
Michael Kimball: I'm off for eight weeks. That's the one benefit of having the long paternity for me. I'd already been saving leave and just saved even more. But it's not enough.
I just feel like I'm in a situation — I've got a government job. I have nice wages and benefits. You probably already have, or I can look it up. My health insurance plan costs me and my employer whatever it is, more than $30,000 a year. And it's just insane to me that this is what the good life is; that when your baby is born has a huge financial impact on the out-of-pocket expenses, and some people are not going to be prepared for it, like I was. So it's very frustrating.
Sick Note: Yeah, and I think that's the thing. I think obviously, you have the right instinct to mention that it's not as bad for you as it could be. This is something I think about a lot too, with me and my migraines—at least I have insurance and all that stuff. But at the same time, you do have to be really very rich for that stuff to not impact you at all. If you have to pay $1,200 out-of-pocket or whatever, you have to be fucking rich for that to not impact you at all, because that's $1,200 you might have spent on, oh, I don't know, your new baby, a crib or diapers or whatever, all that shit, or their college fund. The money is real, whoever is spending it. Unless you are literally a multimillionaire, that money does add up.
Michael Kimball: Yeah, totally. And even on the margins, I know that plans are regional, but our cost of living here is lower, so our wages are lower. $1,200 might be a bigger deal than it is to other people. It's all relative because the higher wages in New York or wherever it is. My friends that live on the coasts, it's hilarious what they can afford compared to what we can here. But yeah, it's like you said. You have to be really, really rich to have this stuff not affect your day-to-day life, even when you have it pretty plum like I do.