Proposed law would remove large, unexpected expense from new parents in rare unfortunate circumstances.
The obscure health insurance birthday rule could be on its way out, sparing new parents the risk of enormous unexpected medical expenses in the case of certain care requirements for the newborn.
This regulation dictates the way that insurance companies choose coverage when both parents have a plan.
The bill would take away the health insurance birthday rule, letting the parents decide which policy covers their child. As it stands, the regulation requires the coverage of the parent whose birthday occurs first in the calendar year to be the one that would cover the newborn with the first plan. The proposed legislation would completely remove the regulation. As a result, because of this rather trivial regulation, the parent with the lowest amount of coverage may be the one with the plan covering the baby.
As a result, if the newborn requires additional care, such as time in the neonatal intensive care unit (NICU), it could saddle the new parents with astonishing unexpected medical expected medical expenses in the tens or even hundreds of thousands of dollar ranges. Many parents aren’t aware of this rule and are completely blindsided by expenses associated with care for their newborns.
The health insurance birthday rule can make double coverage a financially devastating situation for parents.
While it may seem that parents who each have coverage through their employers would have ample coverage for their newborn, that isn’t the way the current system works.
The bill to remove the rule, the Empowering Parents’ Healthcare Choices Act, was introduced by U.S. Rep. Sharice Davids (D-Kansas). The bill was created to eliminate that rule and the “coordination of benefits policy” that often confuses new parents when they initially enroll their newborn for coverage.
“Parents should have the power when it comes to their new baby’s health care coverage,” said Davids. The rule is essentially arbitrary but wo
uld be fair only if all employer sponsored health insurance policies provided comparable coverage. As that is not the case, when one parent’s plan is more generous than another, a matter of a birthdate can cause the health insurance birthday rule to work against them.