A loophole allowed their medical insurance provider to refuse coverage for the birth of their son. Now these parents are stuck with a $28,000 bill.

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The Hendrickson-Craig family. Image via Samitha Hendrickson

Last February, Samitha Hendrickson gave birth to her first child.

The labor and delivery were long and not without serious complications. Hendrickson needed an emergency C-section, or cesarean. Her newborn couldn’t breathe on his own and needed to be resuscitated.

Her son, Haroun, spent two days in the neonatal intensive care unit (NICU). But once he was finally stable enough to go home, Hendrickson took a turn for the worse.

She was readmitted to the hospital for postpartum preeclampsia, a potentially fatal condition related to high blood pressure.

Finally, 11 days after Haroum’s birth, Hendrickson and her newborn both appeared to be out of the woods.

Then, the trouble with their health insurance began.

Hendrickson, a yoga instructor, and her husband, Scott Craig, a nuclear pharmacist, had taken care to choose an in-network preferred hospital of their insurer, Blue Cross Blue Shield Anthem.

Hendrickson’s obstetrician was also an attending physician there. Yet, the bill for the hospital was a jaw-dropping $27, 411.81.

Because of the medical crises Hendrickson and her baby had endured, the family had missed the 30-day window to enroll their newborn on Craig’s health insurance plan… a requirement they hadn’t even known existed.

“Not one of our medical providers or billing agencies advised us that we needed to get [Haroun] enrolled as soon as possible,” Hendrickson said. “Honestly, it was not in the forefront of our mind. We were happy to have a healthy family all together at home.”

What’s followed has been a Kafkaesque nightmare for the Tacoma, Washington, family.

Craig’s health insurer refused to let him add the baby to their plan. The new Blue Cross plan purchased through their state’s insurance exchange argued that the hospital where Haroum was born wasn’t in their network, so they weren’t footing the bill.

The state’s health insurance commissioner explained that while Washington state law does require health plans to cover newborns, Craig’s insurance was a nationally offered plan and therefore exempt.

The hospital billing department also refused to budge on the enormous bill, calling it a “flat rate” the couple couldn’t negotiate.

“At first, I was like, ‘You know what? We have insurance. We should be covered. This is no big deal. It’s a misunderstanding,’” Craig recalled. “It wasn’t until the second [appeal] that I thought, ‘Holy crap. We could actually be held responsible for this.’”

“We can’t afford it,” Hendrickson said. “It’s just not right. There’s something deeply flawed with our healthcare system.”

Having a baby should be one of the most exhilarating times of your life. Yet, thanks to outrageously high hospital bills and health insurance woes, it’s become one of the most stressful times for many parents.

“We see a wide variety of behaviors from [health insurers]. Some are definitely creating extra challenges to try to wear people down,” said Carol Sakala, PhD, director of Childbirth Connection programs for the National Partnership for Women and Families. “The public thinks we have a healthcare system, but at its base, it’s a business, and different businesses have different degrees of how responsibly they operate.”

CoPatient, a medical bill advocacy service, has taken Hendrickson and Craig on as clients. Their situation isn’t an anomaly. Akshay Gupta, the company’s co-founder, has seen an increase in stressed-out new parents whose newborn wasn’t put on a plan in time. They, too, are struggling with bills that equal the price of a new car.

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“It’s just not right. There’s something deeply flawed with our healthcare system,” said Hendrickson. Image via Samitha Hendrickson

It’s an easy mistake to make, after all, considering the tangle of complicated, and sometimes contradictory, healthcare guidelines and policies new parents are expected to navigate.

For instance, there’s automatic coverage under the Affordable Care Act (ACA) for a newborn’s first 30 days… but that isn’t always true.

“State laws apply and overrule federal laws across the country, and there are exceptions for grandfathered plans. There are a lot of rules,” Gupta said. “It’s very complicated, and for people who are laypersons to understand all this, especially with a baby in the NICU? It’s a bit much.”

Little baby, big bills

The biggest mistake people can make when it comes to health insurance?

“Assuming that because they have insurance, they’ll be covered,” said Dr. Robert Pearl, former CEO of The Permanente Medical Group and author of “Mistreated: Why We Think We’re Getting Good Health Care — and Why We’re Usually Wrong.”

“It should be like that. As a physician, I’m frustrated that’s not the American healthcare system,” he said.

There are a number of ways that new parents can be stuck with sky-high hospital bills, even when both your hospital and every provider you see are “in network.”

The most recent data available shows that between 2004 and 2010, average insurance payments for maternal care increased by 49 percent for vaginal births. And as insurers search for ways to stay sustainable and turn a profit, “one way to do that is to increase out-of-pocket costs,” Sakala said.

Additionally, during that aforementioned 2004 to 2010 period, out-of-pocket payments for maternal care covered by commercial insurance also increased fourfold.

Insurers aren’t necessarily breaking the law by, say, refusing to pay for a sick baby who wasn’t enrolled according to their specific timeline. Those are the rules, they argue.

“But the rules are messed up,” Gupta said.

How to protect your family (and savings)

To avoid sticker shock after your baby arrives, you’ll need to be proactive.

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Before you get pregnant

Choose your health plan carefully

Make sure it’s regulated by the Affordable Care Act.

“These are mandated to provide maternity coverage,” Pearl said. “That doesn’t mean your care will be totally covered, but maternity is included, and a significant amount of the cost should be reimbursed.”

Beware of short-term insurance plans that don’t carry the same requirement. If you anticipate a baby on the way some point soon, your best bet, says Pearl, is a policy with a higher monthly premium and lower out-of-pocket costs.

Before you go into labor

Consider the care you want

Not all hospitals are the same. That’s true about their fees as well as their protocols.

“The door of the hospital that you walk into can impact the likelihood of different kinds of procedures being done,” Sakala said.

Some of those could be quite costly. For instance, almost half of all cesarean deliveries in the United States are considered unnecessary. “We encourage women to carefully choose their provider and place of birth,” Sakala said.

Confirm your hospital is in network

“Most women who are pregnant have time to ask questions of their insurer, hospital, and physician,” Pearl said. And not days before baby arrives, but months.

Share your due date and say, “I want to know that all care for me and my child will be covered. Can you confirm that?”

Don’t forget to document everything.

After your baby arrives

Add your newborn to your health plan ASAP

This is arguably the most important step you can take. Whether you’re self-employed or have health coverage through your employer, enroll your baby as soon as you can after their birth — and do so in writing, in case there’s an issue down the road.

“In the end, [enrollment] doesn’t take very long, but you have to do it,” Gupta said.

If you still receive a sky-high bill

Seek help in higher places

Not getting anywhere with the person who answers the phone at your health insurer or hospital? Ask to speak to a supervisor. They’ll have more knowledge and power to help you, says Gupta.

You may also consider hiring a medical billing advocate to fight the good fight for you.

Contact your state’s insurance commissioner

“They have helplines and caseworkers that help consumers work through issues where insurance is not paying for care that should be covered,” explained Claire McAndrew, director of campaigns and partnerships at Families USA, a nonprofit consumer health advocacy group.

File a complaint

If you feel thwarted at every turn, consider reaching out to the National Committee for Quality Assurance (NCQA), an organization which accredits and rates insurers. “They investigate every complaint, which could give you a little leverage,” Sakala said.

Take heart

“One never has to give up,” Gupta said. “But if you play your cards right up front, you’ll minimize [problems].”

Scott Craig remains hopeful that he and his wife won’t be held responsible for every cent of their son’s nearly $28,000 hospital bill.

However, Hendrickson isn’t so sure.

“I feel we’re going to be stuck with this somehow,” Hendrickson said. And even if their appeal is successful? That troubles her, too.

“I think of all the other people they’ve fooled into paying that amount,” she said. “That’s not fair either.”