Insurance coverage for home birth: A laborious process

It was Stephanie Watson-Campbell’s dream to give birth to her first child at home.  She and her husband Fergus Campbell readied their second floor walk-up apartment in Brooklyn, NY. Certified nurse midwife Marcy Tardio agreed to be their care provider during the birth.

But when Stephanie was six months pregnant, Campbell found out that Godiva, a subsidiary of the Campbell Soup Company, wouldn’t pay for home birth as part of its health insurance.

“You know Campbell Soup really claims to be really family-oriented and really support families,” said Campbell, who has no familial relation to the company. “I just wasn't seeing it in this case.  I thought it was a really poor decision.”

The couple had planned to pay their midwife’s $7,500 fee with the Aetna health insurance Campbell received through his job. But when Watson-Campbell informed Aetna about her birth plan, she found out her home birth would not be covered, despite New York State laws that require insurance companies to cover home birth."What I thought was going to be an easy process ended up in an absolute nightmare," said Watson-Campbell.

About 1 percent of parents choose to have their babies at home in the United States, a pattern echoed in New York City. They seek an alternative to a hospital-based maternity care system that they say takes away autonomy about birthing choices. But many parents find that getting health insurance companies to cover the cost of home birth can be a major challenge.

According to a special 2005 statement from the New York State Insurance Department's Office of General Counsel, if a midwife's scope of practice includes home birth, her fee should be paid by New York State-based insurance companies.

But sometimes the state law doesn't apply. A federal law passed in 1974, the Employee Retirement Income Security Act or (ERISA), exempts companies that are self-funded--providing insurance coverage for their own employees through a company-pooled fund--from having to adhere to state laws that regulate insurance.

As the Campbells found, their company was self-insured. Aetna just took care of the administration of the health care plan.

"Both of them were pointing fingers at each other,” said Watson-Campbell.  “Aetna was pointing fingers at Campbell Soup and Campbell Soup was pointing fingers at Aetna."

Outside of New York State, Aetna does not offer coverage for home birth. In an email, a spokeswoman said, "Aetna considers planned deliveries at home and associated services not medically appropriate." 

Campbell Soup Company spokesperson Anthony Sanzio said, “According to the guidelines of the American College of Obstetrics and Gynecology, the hospital is the safest place.  We are trying to make sure that our employees get quality benefits and quality care."

In letters sent to Watson-Campbell, the company referred to studies conducted in Australia and Washington State that highlight a higher risk of births that happen in the home for mothers who have had complicated pregnancies.  But the studies also state that, for mothers with low-risk pregnancies, home birth is a suitable option.

Watson-Campbell said that despite a prior miscarriage, her obstetrician said she had a low-risk pregnancy. But after repeated appeals to Aetna and the Campbell Soup Company, the couple got nowhere. So Campbell quit his job.

He found a new job as a store manager for GameStop, a company that provided Cigna insurance, which eventually paid $4,400. Watson-Campbell’s midwife agreed to lower her fee, so the couple will end up paying about $600 out of pocket. The couple is so disillusioned with their experience with health care that they are thinking about moving out of the country, said Watson-Campbell.

“Realistically can we have multiple children here?” asked Watson-Campbell.  “[For] quality of life having multiple children, is it worth it?”

Haya Brant is employed by many midwives in New York City to manage their clients' billing with insurance companies.  She says that self-funded plans are the hardest to work with.

"I think the bottom line [is] they are trying to manage their costs," said Brant, "So anything that falls outside of the contract... it's just not going through, so [they] just figure out a way to deny it."

Even with insurance companies based in New York State and thus required to cover home birth, Brant runs into resistance. Most insurance companies don’t have midwives certified to be in their network, so she must apply for an exception to their policies to employ an out-of-network midwife.  She also has to resubmit claims asking for a higher rate if the insurance companies return with a low fee.

Parents with other types of state or federal-sponsored insurance also find that they have to pay at least part of the midwife’s fee out-of-pocket.

Cannon and Kassie Anderson had a home birth last year that was covered by Medicaid.  Regular Medicaid only pays around $1,000, but just before the birth the couple switched to Affinity, another version of Medicaid, and were reimbursed $3,500.

"I was so grateful that I had switched when I did because we only had to pay $2,000, which isn't bad," said Anderson. "But it's obviously a lot better than the birthing center at Roosevelt. If you pay out-of-pocket it's like $9,000, and I know physicians at the hospital are even more."

Amy and Steven Atchley had a baby on March 2, 2008 in their condo at Fort Wadsworth on Staten Island. Atchley works for the Coast Guard, so they have a military insurance called US Family Health Plan, a version of the federally administered military insurance, TRICARE.  The military insurance is also not covered by New York State law because it is a federally recognized self-insured plan and is considered exempt. But the Atchley’s plan still agreed to pay $3,000. They will end up paying about $1,000 out of pocket for their home birth.

"I would have to say it was worth every penny and I would do it over and over again," said Amy Atchley, "‘cause it was just that wonderful having my baby at home."