Bringing a new child into the world can be one of the most joyous yet stressful times in your life, and an unexpected NICU stay adds an added layer of anxiety and stress. During this time, your focus is entirely on the health of your newborn and watching them get strong enough to be released. If you have insurance, you assume that the accruing expenses of labor and delivery along with a NICU stay will be covered under your plan. However, as one couple learned, the insurance companies will use any loophole to get out of covering these medical bills.
Charlie Kjelshus’ oxygen levels dropped during labor, which can result in possible brain injury. Her treatment in the NICU included whole-body cooling along with other costly treatments. Both parents had insurance through their work, so they added Charlie to the mother Kayla’s plan that had a lower deductible and overall better benefits. This led to insurance refusing to pay, and a $200,000+ hospital bill.
So what gives? When both parents have insurance, they are supposed to coordinate insurance. Unbeknownst to the parents of Charlie, the insurance company claimed that the “birthday rule” applies and refused coverage of their dependent. “A child with double health insurance eligibility must take as primary coverage the plan of the parent whose birthday comes first in the calendar year; the other parent's insurance is considered secondary. (NPR 2021)” In the case of the Kjelshus family, the father with the higher deductible and out of state network should be used as the primary insurance because his birthday falls first in the calendar year.
While they may have not run into this issue with an uncomplicated delivery, a NICU stay with expensive treatment was a red flag for Kayla’s insurance company so they claimed the Birthday Rule was in effect. Like most not involved in insurance, they were unaware that this was even a rule. After a year of dealing with insurance and the hospital the family, along with some help, was able to get everything sorted out and the hospital bill covered.
What can we learn from their experience? Contact your insurance company before delivery to determine if there are any coverage rules. Having a baby is a life changing event – even in the eyes of insurance companies – so any changes to insurance can be made at that time.
If you have questions about your prenatal care or childbirth, or your child required cooling treatment, please contact our Memphis law office today at 888-443-4387