Planning for a baby? What you should know about health insurance options

Last year, Tash Lay gave birth in a private hospital with an obstetrician she chose.

Ms Lay, who works in tech consulting and lives on Gadigal land in Sydney, says she loved her experience but understanding what was (and was not) covered by insurance was confusing as a first-time parent.

"There's so many out-of-pocket costs and … not a lot of transparency."

In Australia you can give birth and receive medical care while you are pregnant (antenatal care) and after the birth (postnatal care) in the public system or the private system.

Knowing what these options look like and the potential costs associated with them is helpful in deciding what choices might best suit you.

Here's what experts say you need to consider.

Quick jump to:

• What are your options in the public system?
• What are the out-of-pocket costs in the public system?
• How much does private health insurance that includes birth and pregnancy care cost?
• What does private obstetric care involve?
• What are the out-of-pocket costs?
• Will where I live affect what care is available?
• When should I research my options?

What are your options in the public system?

"When it comes to having a baby in Australia, there are a lot of models available and a lot of different options," says Hannah Dahlen, a professor of midwifery and the director of research in the School of Nursing and Midwifery at Western Sydney University.

According to the Australian Institute of Health and Welfare (AIHW) there are 11 major category models.

Professor Dahlen says options in the public system include:

• Standard fragmented maternity care — where you attend a public hospital and potentially see different midwives and doctors throughout the antenatal period, the birth and the postnatal period.
• GP shared maternity care (also known as shared care) — antenatal appointments are split between a qualified general practitioner and staff at a public hospital. You would then typically give birth and have early postnatal care in (or provided by) the hospital, before transitioning back to your GP.
• Midwifery group practice (or MGP) — involves a midwife or a small group of midwives providing the care throughout your pregnancy. They are generally on call for the birth and provide postnatal care for two to six weeks afterwards, Professor Dahlen says. Usually limited to major public hospitals and can be competitive to get a spot, with admittance often based on where you live and your due date.

Out-of-pocket costs in the public system

A public patient is usually covered by Medicare, but Professor Dahlen says there can be some out-of-pocket costs too.

You may be required to pay for ultrasounds performed in a private facility or blood tests done outside the hospital, for example, she says.

The non-invasive prenatal test (NIPT) — a screening test — is not rebated by Medicare (or covered by private health insurance) and costs about $500 if you elect to have it done.

And, if you choose to share your maternity care with a GP that does not bulk bill, you will also have to pay the gap fee for each antenatal and postnatal appointment.

How much does private health insurance cost for pregnancy?

Even if you already have private health insurance, that policy might not include birth and pregnancy-related hospital care.

Insurance expert Jodi Bird from consumer group Choice says health insurance is generally categorised into gold, silver, bronze and basic tiers.

Typically, birth and pregnancy-related care is covered by the gold tier or sometimes an option called silver plus, he says.

"For hospital policies that cover pregnancy, the price ranges from $135 per month in the Northern Territory through to $600 a month in Victoria."

The private health insurance rebate can reduce those costs for some, and specifics like the amount of hospital excess someone pays and if their policy includes extras (such as dental and physio) will also impact the premium.

Health insurance providers have a strict 12-month waiting period that applies to the date you're admitted to hospital for the birth, so you need to have the right level of care before you are pregnant to qualify for private care, Mr Bird says.

A premature birth within that waiting period wouldn't be covered, he warns

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What does private obstetric care involve?

Mr Bird says people generally choose private cover so they can give birth in a private hospital and choose a preferred obstetrician.

You may have a better chance of a private room and your partner being able to stay in the hospital, too.

Professor Dahlen says with private obstetric care you have an obstetrician (or a group of obstetricians) who provide your antenatal care, are on call for your birth, provide the postnatal care in the hospital and then generally see you again at six weeks.

Will Milford, an obstetrician gynaecologist, says your GP will help guide you and write a referral.

"For private obstetrics, the GP might have a bit of a discussion about some obstetricians that they've worked with or would recommend or … a family will come to their GP saying, 'we've got friends who have seen so and so', or 'we've heard this person's good'."

Other people might choose their obstetrician based on the private hospital that obstetrician works in, Dr Milford says.

You can also pay for an obstetrician out of pocket, but the private hospital fees can fall in the vicinity of $10,000 to $20,000, Dr Milford says.

Professor Dahlen says private obstetricians can also sometimes attend births in a public hospital. So, you can also be a private patient in a public hospital.

There are private midwives, too

There is also private midwifery, where a privately practising midwife provides the antenatal care, Professor Dahlen says.

The midwife may attend and provide support during the birth if they have visiting access at that hospital and provide up to six weeks of postnatal care, she says.

Private health funds don't cover a private midwife like they cover an obstetrician in a private hospital but there are some Medicare rebates (similar to those of a private obstetrician).

Most Australian homebirths are attended by private midwives, Professor Dahlen says, or care is provided through "one of the 20 publicly funded homebirth programs that work across Australia".

As an example of cost, Professor Dahlen says care through a privately practising midwife could cost $6,000, before any Medicare rebates.

Out-of-pocket costs you should expect if you choose private

Ms Lay says she was surprised by the amount of out-of-pocket costs.

"I just thought everything leading up to [the birth] would have been covered."

But her antenatal appointments weren't covered and once in hospital, Ms Lay says she also had to pay some additional fees, including her hospital excess.

All up, Ms Lay says it cost her about $11,000 to have her baby in the private system, including the higher health insurance premium that covered birth and pregnancy-related hospital care.

Here are some of the extra costs if you have pregnancy cover in the private system:

• Antenatal and postnatal obstetrician appointments — Health insurers do not cover out-of-hospital services. Typically, Professor Dahlen says an obstetrician's services could range from $1,000 to $10,000. Mr Bird says the amount depends on how much an obstetrician charged above the Medicare rebate.
• Pregnancy management fee — a one-off fee charged by a private obstetrician costing between $1,250 and $4,550, Mr Bird says. You can think of the pregnancy management fee as the charge for having an obstetrician look after you 24/7 for the duration of your pregnancy, Dr Milford says. Like other private obstetric costs, he says the fee varies depending on the practitioner.
• Hospital excess — the amount you personally pay towards staying in a private hospital before your health insurer covers it, and like other forms of insurance, a higher excess can mean a lower premium.
• Anaesthetists and paediatrician fees — there may be gap fees for an anaesthetist if you have an epidural, and paediatrician visit.
• Some optional genetic screening tests — such as the non-invasive prenatal test (NIPT)

In addition to your excess for hospital accommodation, Mr Bird says out-of-pocket costs for giving birth in a private hospital generally range between $400 and $500.

Do your options change in a regional or rural area?

In short, it depends on where you live.

Mr Bird recommends checking what (if any) private hospitals are accessible where you live before forking out for private insurance.

With the closures of maternity services in some private hospitals, Professor Dahlen says there could be fewer options than you think.

"You might still have a GP obstetrician who can function under that private insurance, but you would birth in the local [public] maternity hospital [if there is no] private hospital near you," Professor Dahlen explains.

You also might not have the option of a private midwife or be able to see the same midwife or midwives throughout your care.

Dr Milford says some of his patients in regional or remote areas choose to travel into Brisbane to have their baby and sometimes their antenatal care is a combination of shared care, telehealth and in-person appointments.

When should you do your research?

Ideally, Professor Dahlen says you would begin to research your options and prepare a few years before having a baby.

"Don't just think about the birth and the pretty rooms. Think about the whole package, the whole deal and what's ahead," Professor Dahlen urges.

Dr Milford encourages people to place value in continuity of care, whether that be via a private midwife, public MGP or private obstetric care.

"[Continuity] is the sort of thing I'd be thinking about and trying to sort of work out how you can do that within your own budget."

Rates of medical intervention also differ between the models.

Professor Dahlen says that recent research found that the patients of private obstetricians had lower reported rates of birth trauma but higher rates of intervention than some other models.

The postpartum care offered by private hospital and obstetric clinics can also differ greatly, Dr Milford says.

For Tash Lay, there were "trade-offs" when it came to choosing what made the most sense for her and her baby.

Conscious of being a first-time parent in her thirties with a medical history, Ms Lay wanted to choose her obstetrician.

She says she and her husband had established careers, which allowed her to "absorb" costs she hadn't expected, but that equation might look different to other families.

"It's an extra $11,000 that you might use to extend your maternity leave [instead]," she says.

This article contains general information only. You should consider obtaining independent professional advice in relation to your particular circumstances.