Having a baby is super expensive. For us the expense wasn’t buying the things Little Guy would need, it was the enormous medical bills that came after our hospital stays. You have nine months to prepare for this. Do you have a savings game plan?
There are loads of ways to save money each month. Just look at my 20 life hacks to be more frugal post! Where you put that money is a different story entirely. When we found out we were pregnant in August of last year, we immediately changed our spending habits. We went from spending $4300 a month (fixed bills/mortgage and variable expenses) to spending $3300 or less. That number is even still a little inflated because we used money that we had already set aside for updating our kitchen. If we hadn’t redone our kitchen, the new spending amount would be even lower.
We did a no spend month and every month after that we cut out everything that wasn’t necessary. No eating out, no shopping, no unnecessary spending. We increased our HSA contributions to max it out for 2017 and 2018. We adjusted our 401Ks to have less go into our checking account each month. We also set up an online savings account with Ally which has one of the highest interest rates on a savings account out there.
We packed away so much money from September to March. Every extra penny we put into our savings accounts. But before we even saw a dime hit our checking account on payday, we optimized our HSA.
Optimizing the HSA
A Health Savings Account can be used to set aside money for medical related expenses. You can reimburse yourself (remember to save the receipts!) or you can use your HSA debit card to directly pay for the expense. All the money that you put into your HSA is not taxed. We had a small amount ($150-$300) deducted from my paycheck every two weeks. We maxed it out for 2017 and we will max it out for 2018 (you can visit www.healthcare.gov for the specifics of the HSA because I am not a tax professional). You can also learn more about the HSA and how to optimize it more at ChooseFI.com.
With putting money into our HSA pre-tax it reduced our overall taxes that were taken out of each paycheck. Less taxable income = more dollars in our account. There are so many “tax-hacks” out there that it can be overwhelming. We used this article by The Millionaire Educator as a helpful resource to find our ideal income range to save the most in taxes.
Insurance Customer Service will be Your Best Friend
We reviewed our coverage with a call to our insurance. Blue Cross and Blue Shield has really super customer service and was able to answer all of my anxious first time mother questions. They told me the cost of everything and what exactly they would cover. For the birth of my child without complications or a C-Section, the cost was $1030.00 out of pocket. My OB’s office made us pay up front by the time I was 20 weeks along. Luckily, I was 20 weeks in December so we had that amount in our HSA.
With all of the costs jotted down, I went through my pregnancy without a hitch. That is until week 32 when I started to severely swell and was eventually put on bed rest. There is nothing that can prepare a first time mom for an emergency C-Section and a stint in the NICU for your baby. I gave birth to Little Guy at 35 weeks.
While in the hospital, I called my insurance company to see what had come through to them from the hospital. I made sure that all of my charges would go through first to hit my max out of pocket and then for my son.
Following Up with Your Insurance Company
After Little Guy and I came home and the bills started rolling in, I made sure to follow up with the insurance company and the hospital billing department every single time. Sounds excessive? I could have been charged hundreds of dollars more if I wasn’t diligent in checking how every charge was coded. I wasn’t afraid to ask what a specific charge was or where it came from. Everyone I spoke with was very kind in explaining what charges were or even correcting them for me.
If your hospital asks that you prepay for your epidural and you either don’t use it or your hospital charges less for the injection, you will also need to follow up with the company you prepaid through. I saw the discrepancy on my bill and called the company I paid through. I got a refund of a little less than $18.
Even though I had some charges corrected and we had money stashed away in our HSA, our bill was still rather large. It was in the ballpark of $7800 for the both of us after insurance (it would have been in the $60K realm if I didn’t have insurance). Yes, I could have paid it outright but I didn’t want to. I applied for financial aid. The worst that could happen is that they would tell me no. And the hospital did just that. They told me no. It was exactly what I expected but then came a shining light.
I settled with the hospital. The billing department that had declined my application for financial aid reached out to me after the decline letter had been sent to see if I would settle and pay in full. The offered $3800 off my bill!!! You better believe that I was ready to hand over my HSA card number. Then I thought about all of the credit card points I could earn with that high of a charge and paid with that instead. I reimbursed my credit card with my HSA money to pay my credit card bill in full. To reimburse yourself through your HSA, you will need to keep all of your receipts.
In the end, we paid about $5000 for my week in the hospital, the C-Section, and Little Guy’s five day NICU stay. It could have been much more expensive we hadn’t diligently planned and followed up with our insurance company and hospital department.
I hope that this prepares you for what is to come or encourages you to reach out and take control of your post baby bills. It’s not easy, but you can do it mama! 🙂