Why do insurance companies have a 10 to 12 month waiting period to cover maternity?

Question

The only reason I ask is because I am looking for insurance we are going to have the optional maternity coverage added. With my daughter I was 2 months pregnant when I got hired at the company that covered my maternity for her. Why did I not have to wait then, but now I have to?

Answer 1

Because on private policies, the only people who buy the maternity coverage, are the people who want to use it.  Then they cancel the maternity coverage.  

ON a group policy with maternity benefits - through an employer - everyone pays for maternity - the men, the post menopausal women, people who've been sterilized, etc.  There's a "spread of cost" among people who aren't using it.

For private coverage, there's no spread of cost, so it's effectively prepaid.

Answer 2

Because you went to work for a company,  An insurance company will have to shell out thousands of dollars for a pregnancy and they don't want to give people an incentive to wait even longer to get the coverage AND they don't want to pay for a pregnancy for someone who was already pregnant before they got the policy.

If you went into business selling hotdogs and you bought them for $2 and sold them for $1 you wouldn't be in business very long.  Same concept -- they can't take $100/month and shell out $10,000 for a pregnancy.  So, if they can avoid paying an early claim then that's to their advantage....and everybody else's because it keeps premiums lower.

Answer 3

Maternity coverage is more of a pre-payment plan with individual policies. Only women who are planning on getting pregnant get the maternity coverage and the insurance company knows that. No insurance company is going to pay out more for the delivery than it received in premium. Complications of pregnancy, such as a C-section, are covered even if you don't have maternity.

Group policies are different and are mandated to cover pregnancy without any waiting period and cannot exclude pregnancy as a pre-existing condition. The premium is increased for the entire group to pay for the delivery, even for the single males.

Answer 4

Maybe different policies?  Or maybe the insurance company changed their coverages?   Maybe you were already insured before you became pregnant last time?  They do not want someone going out and getting a job just so they will have the insurance because they are pregnant.  Although that is what I would do too.

That's interesting though because most other "preexisting conditions" have only a 6 month waiting period.

Answer 5

Most likely the company you worked for had the maternity as part of its coverage for employees.It is quite obvious why Insurance companies install a waiting period. of 10 to 12 months. If you owned the insurance company would you have no restriction?  That would mean that anyone who found herself pregnant would get coverage  for very little cost and the companies would be paying out millions for very little premiums. If you want coverage you buy before you become pregnant and 10 to 12 months is most likely before the pregnancy.

Answer 6

You probably had a group policy with your daughter, which normally has no waiting period. Insurance companies have the waiting period on individual polices so that they know people are not already pregnant when they purchase the policy.  Otherwise many people would purchase it and then let it lapse after delivery.