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Medical Insurance Coverage & Requirements


sugarfamily

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What insurance requirements are there for adoption? We are in the process of converting our insurance to individual policies and there is a 9 month waiting period before you're able to add a child onto your policy. Before that time, you can take out a child only policy that is a separate policy once they're born, but you can't add them to yours. Is that going to be a problem?

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Hi sugarfamily,

I feel like I'm dense because I sort of don't understand your question - like the part about converting them to individual policies....and the child only policy, etc....anyway - I'm wondering if y'all are self-employed or self-insured rather than insured through a company you or your husband works for...which is the case with us (my husband works for Nokia and our health/medical insurance is United Healthcare but is offered through Nokia and is supplemented by Nokia (we pay a small (well, small in comparison to how much medical insurance really costs) amount toward the medical insurance expense...anyway...I'll go ahead and throw out there how it worked for us although it's probably all different for everyone...

So, with us - each year, there's a window of a week or two where Lance enrolls (or re-enrolls) for all the benefits (life insurance, health insurance, 401-K, flexible spending accounts, etc) and there are usually a few changes to the insurance plans so we pick out which one we want (PPO, HMO, etc) and he enrolls.  That time is the only time he can make changes to his benefits (i.e. add someone to the policy, drop someone, change insurance plans, etc) UNLESS there is a life changing event that occurs during the year (which are defined by the guidelines Nokia provides) and the birth or adoption of a child qualifies as a life changing event (as do a few other things)...so, when Kayleigh was born - after we officially took placement of her (signing the initial paperwork, etc from Abrazo - it's usually 48 hours after the birth mother gives birth to her baby but can be longer if she needs more time to do this (I believe she has to relinquish her rights before you're able to take placement but I'm certainly not an expert on the Texas laws, etc so take what I'm saying with a grain of salt and for sure confirm this with the appropriate people (Abrazo, an attorney, and for the insurance stuff - either your human resources contact at the company your husband/you work for or if you're self-insured through the insurance company you're affiliated with)...anyway, for us - we took placement of Kayleigh 4 days after she was born (she was born on 12/5/02 and we took placement on 12/9/02 because 12/8/02 (48 hrs would have been at 10:18pm on 12/7/02 and 12/8/02 fell on a Sunday) so on 12/9/02 - Kayleigh was officially added to our health insurance policy and her medical expenses were covered by our insurance from that point forward.

But again, every insurance company has different policies so how things were done with ours is different from how it's done with others but just to give you an idea of what our situation was like - Kayleigh was essentially unisured & we were responsible for her medical expenses (because it was a private pay case meaning Kayleigh's birthmother did not have insurance or medicaid) from 12/5/02 - 12/8/02.  (Also, just wanted to clarify that we were told from the beginning that Kayleigh's case was a private pay and were given the opportunity to continue with her case or not depending on whether we were comfortable with a private pay case).

Sorry to ramble on...there is a form that Abrazo includes in some of the initial paperwork they give you (at least they did when we went through Orientation back in August 2002) for you to send in to your insurance company that they sign/verify that says something about their insurance coverage for the baby.  I would HIGHLY encourage you to follow-up with that form/letter and get it back from them or get something in writing from them that fully explains how and when the coverage kicks in and what triggers the "kicking-in" part.  

The reason I say this is because there was a bit of ambiguity on the part of our insurance company's coverage for Kayleigh - the HR (human resources) guy at Nokia initially told us (this was on Monday, 12/9 before we had done the placement paperwork) that insurance wouldn't kick in until the adoption was finalized - that completely freaked us out - that meant Kayleigh would be un-insured until we finalized her adoption which can't happen until Kayleigh has lived with us for at least 6 months - and she was in the NICU (neo-natal intensive care unit) and we didn't know when she'd get out.  Anyway, that was misinformation on Nokia's part and it all got sorted out but had we followed-through with that form, we wouldn't have had to have freaked out for the few hours we did, wondering how we could manage all the medical bills, etc that could come up...anyway, be sure you get everything clarified as soon as possible so when it's time to take placement, that's one less thing you have to concern yourself with and you can just enjoy the moment because it's a once-in-a-lifetime moment to enjoy!!

-Lisa

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Yes, I'm self-employed so that is why I am looking at individual, versus group, insurance.

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My husband is self-employed with an individual policy like you are referencing.  I would encourage you to really check the language of your policy to be sure that the 9-month window you reference doesn't have to do with maternity coverage as opposed to adoption/birth coverage.

Most individual policies require that you carry a maternity rider to cover pregnancy-related expenses (hence, the 9 month period which wouldn't be covered under your "normal" policy) -- however, this coverage is vastly different than the insurance coverage you are talking about, which occurs once the child is actually "in the world" and in your home.  My husband's insurance policy (Blue Cross/Blue Shield) immediately kicked in for our children the day they were placed with us -- we could add them immediately without any waiting period, even though our children were 2-1/2 years old and almost 7 months old when they were placed.  (We didn't even have to deal with pre-existing conditions exclusions for them.)  They were covered for everything from day one, and they were put on the policy he already had in effect -- we didn't have to buy an individual policy for them -- we just had to pay the increased premium for family coverage.

Hope your policy terms can be clarified and you find this is the case for you as well!

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Thank you so much for your advice! I looked into another insurance company which handles newborns, adopted and bio, completely differently (they are automatically added in to our policy) and there is no waiting period, so we could go forward with adoption whenever there is a baby available - not at the whims of our insurance company. Thanks for encouraging me to look around some more!!

Linda

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  • 2 years later...

There was a great dialogue on the 10-4 Good Buddies thread (very early in it) regarding insurance and just thought these posts may be useful for newbies who are just getting into the early stages of all this and getting forms filled out, etc...

-Lisa

'mbell' post='20350' date='Sep 22 2005, 07:57 PM'

We're thinking of all our good buddies right now and hoping everyone is making progress on the paperwork.

it will be interesting to work on the insurance verification - we have state insurance and our isurance company provides our benefits, but our plan is self funded so it is actually administered by the state - so who's going to take responsibility for signing this form ????? you guess is as good as mine right now. Our local benefits rep said that the adoption of a child is a "qualifying event", but how can we prove responsibility for the costs before we have responsibility for the child??? I've gone all through the financial documents and the sample placement document pulling out phrases to quote them etc etc - wish me luck that we get some resolution to this without an ENORMOUS struggle ...anyone else have a similar situation and any good advice? :blink:

----------------------------------------------------------------------------------------

'mlw' post='20415' date='Sep 24 2005, 01:58 PM'

Mbell, We have run into a similar problem with the insurance. They won't begin to pay on the baby until placement is made. So, they won't sign the form. Dane called and spoke with Elizabeth and she said that is fine. Now we are left wondering if there are any loopholes to figure out how to pay for the baby in those 48 hours, otherwise I guess it will be out of pocket or from our "cafeteria fund"!! Let us know if you all come up with something!!

Hello new parents in waiting, my husband Jason and I are from the Summer Strollers group and I just noticed your insurance posts.

We have looked for that loop hole as well but have come up dry. It seems insurance has not kept up with the times and adoption is something they don't allow for when growing your family. Frustrating but oh well, what ya gonna do except keep trugging along and do the best you can with what ya got.

I still have talks with our insurance about the 48 hour period, I understand there learyness about the baby not being placed however once the baby is placed I think it should be retroactive to birth in my humble opinion. The response I get is where to draw the line, if we adopt a toddler should insurance be retroactive to the childs birth? Again frustrating, I guess it is up to us to try to make it better for the next generation of adopting parents!

Look forward to hearing great news from you guys,

Kristen

Mbell and Mandy and Dane -- I have been researching the health insurance question this week as well and our plan administrator is helping us. I will let you know what we find out. I did look up relevant federal law about what insurance companies are required to cover -- they have to cover from placement, however the law defines placement for adoption as:

"The term 'placement' or being 'placed' for adoption, in connection with any placement for adoption of a child with any person, means the assumption and retention by such person of a legal obligation for total or partial support of such child in anticipation of adoption of such child."

In our cases, we assume financial responsibility when we are matched. Therefore, I am trying to make the argument with health insurance that we have legally assumed total support at the match, which may very well be before the birth, and therefore entitles us to health insurance for the baby from birth. I have no idea if they will accept this, but I will let you know!

There is always something new to learn, right? :)

Susan

Hi all,

Re: the insurance -- thanks Susan for supplying the federal definition for us. I also pulled out some clauses from the peprwork we got to use and they back up that definition. In the Financial Agreement that we have already returned, it states that we sign a "letter of commitment" saying we're responsible for medical expenses. Also, in the Entrustment Agreement which we will sign at placement (and have a sample copy of) see spefically Article I.3. - "legal authority to provide and consent to medical care" and Article I.B.2 - "we accept complete and full responsibility for all medical care from the time of the child's Birth" -- seems like this is all we should need, but it's never that easy is it? Keep plugging away . . .

I've been reading all of your posts regarding medical insurance. I guess I never really gave it much thought. Our insurance provider (which is a large provider since my husband works has a large employer) didn't have any problems with getting us something to say that they would cover an adopted child at the time of placement. Matter of fact, we were quite shocked at how quickly they got us the documentation that the agency needed.

Now, it did specifically state insurance coverage "from the date of placement". It never really dawned on me to even ask them to cover from the time of birth. And while we are definitely shelling out $$$ (our BP will have been living in the Abrazo housing for at least 3 to 4 months when the baby comes), from an HR perspective, I guess I can see the insurance provider's point that it definitely isn't required to pay for the 1st 48 hours. However, my issue has been that if my insurance doesn't cover that 1st 48 hours (which I really don't think it should), then why in the world would the BP's insurance/Medicare not cover those 48 hours. It seems like it should.

Anyway, Joe and I just kind of think "well, ca lavie".....just another one of those adoption things. ;)

Toni,

Hi! You may want to make the call to the insurance company and ask. It couldn't hut. I have my insurance with a large carrier, as well. The documentation states coverage from placement, but when I called, I was told that the coverage would be from birth. I asked for documentation, which they sent.

This raises a good point. Our BP has military insurance that will cover her, so wouldn't it cover her baby until placement occurs and she is no longer the parent/legal guardian?

I really don't know how to find this out since I don't have access to her policy information. All I know is that its called Tri-Care.

Let me know if any of you have any ideas.

Natalee

Hi, Natalie!

Medicaid (and Champus/Tricare, etc.) offer no guarantee of payment for the birth-related bills. Such bills cannot be filed with the insurance companies until after hospital discharge/ placement; therefore, coverage may not be determined for up to 90 days thereafter (even assuming the hospital files in a timely manner), and a birthparent's insurance is not obligated to cover costs for a child legally surrendered for adoption.

Medicaid eligibility (as well as other subsidized programs) is based on a parent's household income, after all, so if your household income exceeds the federally-designated poverty limits, then it stands to reason that your child's medical expenses from birth all rightfully become your obligation, just as if you'd birthed that child. (This is spelled out in the placement contracts, as well.)

This is why we tell folks at orientation to anticipate inclusion of all birth-related medical expenses, and why we estimate for mom and baby's costs on all our estimates. If Medicaid should come through and help cover some portion of the bill, that's great... but be prepared in the event that it doesn't. That comes part and parcel with the joys of parenting!

Hope this helps.

Medicaid eligibility (as well as other subsidized programs) is based on a parent's household income, after all, so if your household income exceeds the federally-designated poverty limits, then it stands to reason that your child's medical expenses from birth all rightfully become your obligation, just as if you'd birthed that child. (This is spelled out in the placement contracts, as well.)

In answer to Toni's question: the qualifying income is for the household of the person for whom coverage is being sought. If a birthparent is seeking coverage for her prenatal care, then her household income must be proven; if an adoptive family is seeking coverage for costs related to the medical care of a child, then their household income would have to fall within the federal limits in order to qualify. Generally, hospitals will file the mother's medical bills with her insurance/Medicaid, but not the baby's, since the relationship between mother and baby terminates at relinquishment. This usually occurs before both parties have been discharged from the hospital, so the bills for the child's medical care follow that child. (Note: welfare reform campaigns further limit eligiblity requirements, so watch that political debate carefully.)

I got great news today on the insurance question :) and wanted to share our learning with others. It seems that the language we pulled together for our Health Plan Administrator worked! We have CareFirst PPO Preferred (part of Blue Cross and Blue Shield) and they have said that "Legally recognized pre-adoptive children are eligible" for health insurance. Legally recognized is consider at the point at which we assume financial responsibility for the baby before birth. They have said that we just need to provide them with the documentation (paperwork at the match) when we take fiscal responsibility.

If it is useful for others, here is the language the our Plan Administrator used in my request to Care First:

TO: Broker Services

[My name, my employer's name that has the health insurance] has started the adoption process for a newborn. While we understand that adoption is a qualyfiying event, there is some question from the adoption agency as to when coverage begins for Carefirst. To facilitate this inquiry, we have done some research and have found federal law (see attached) that addresses this issue. Apparently the law requires coverage for the child at placement of adoption.

Placement of adoption is defined in the Employee Retirement Income Security Act as follows:

Cite – 29USC1169 – Sec. 1169,c,3,B

Placement for adoption

The term “placement, or being “placed” for adoption, in connection with any placement for adoption of a child with any person, means the assumption and retention by such person of a legal obligation for total or partial support of such child in anticipation of adoption of such child. The child’s placement with such person terminates upon the termination of such legal obligation.

Our discussions with the lawyer indicates that it means that the legal definition of placement is when they take financial responsibility for the child. [My name]and her husband will sign paperwork with the birthmother before birth in which they take full financial responsibility for the baby. While Carefirst is not responsible for covering the costs of the birth, the federal law cited above indicates that coverage for the child in their case will start at birth. Is this correct?

I hope this helps others on your path! :)

Susan

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Good idea Lisa!

You have been busy today!!

I had forgotten we had that big discussion...but it was neat to go back through and read again!!

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Thanks - I don't remember why but a week or so ago, I started reading y'alls thread, from the beginning but from my handheld computer which is very, very difficult to post from so I made a mental note when I ran across that great discussion on insurance in your group's thread to be sure to reference it somewhere so it doesn't get buried amongst the posts and not be beneficial to others who are new to the forum and Abrazo (because y'all have like 250+ pages of posts these days - how cool that y'all keep in touch so well with each other!!!)

Anyway - I'm guessing all worked out with y'alls insurance thing - I guess I was actually a bit surprised to read how some people's insurance kicks in at birth - wow! That just amazes me!!! Ours kicked in at placement/entrustment which happened 4 days after Kayleigh's birth - we were told when we got the call about Kayleigh (as she was a BOG who was admitted to the NICU) that it would be a private pay case (i.e. we would be responsible for all medical bills). I guess I just never realized that some companies offered insurance to employees that would take effect at birth (for adoption) - HUGE kudos to those companies (as I'm assuming that's a decision made by HR (Human Resources) on whether or not to select that option when they're shopping for insurance coverage for employees). I hope those of you who have that kind of coverage write a big letter of thank-you to whomever is responsible for making that call - because that's just a good thing to do for those who are adopting!!

-Lisa

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We are quite the chatties over there...pretty much everywhere I guess.

I definintely think that is awesome that some companies will kick in paying immediately. Ours was like yours and kicked in at placement.

You are right a BIG LETTER OF THANKS should go out to those companies!!

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Some other useful insurance discussions from the H3's thread...

-Lisa

Ah!, you just have to love legal paperwork ;)

Talked to our insurance company today. They cannot sign the agreement regarding child coverage prior to the child being added to my plan, BUT they did emphasize that as soon as the child is added to the plan (within 30 days of the placement event) Everything would be covered. They also said after the child is on the plan, they can provide a Letter of Coverage.

So, good news is BABY IS/will be COVERED

Bad news, can't get that specific form filled out (but I think I remember in Orientation the girls saying that this is not uncommon ---insurance not filling out that form)

Anyone else go though this?

Adam,

I had the same issue. My insurance company would not sign a letter stating coverage. However, I was able to find the policy description from my corporate HR department which states that health coverage is effective at the time of placement. That was the best I was able to provide.

Isn't this part fun?!?

Good luck getting everything completed and have fun at the wedding this weekend!

Todd

I have plenty of stuff from St. Jude stating the baby will be covered under insurance with the proper court documents (placement document). When we were going through this with the adoption of Annelise, they told me the coverage is "retro" to the time of birth provided I add the baby to the plan within 30 days (Life Event).

So, I'm not too worried, but I'm a real dot-your-i's and cross-your-t's kind of person so I wish they had something written stating that coverage would be good for all birth stuff. Guess I'll call the insurance company again to see if they have something stating that. I appreciate the feedback.

-Adam

GET OUT! Don't tell me you work at St. Jude as well Adam (along with Joe).

We did get something from St. Jude, I believe HR about the insurance coverage covering from the moment of birth.

Thanks. Logic says that if insurance covers mothers and children (at time of birth) and a child can't be added to a plan until they are born, then there has to be literature stating that the coverage is retroactive to time of birth.

So, I just need to check with HR next week and get it.

Thanks again. :)

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Wow Lisa! Can I just say how impressed I am that you read all of this from what seems like soo long ago on the 10-4 Good Buddies -- I hope our findings can be useful for others!

Susan

Edited by Susan
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Anyway - I'm guessing all worked out with y'alls insurance thing - I guess I was actually a bit surprised to read how some people's insurance kicks in at birth - wow! That just amazes me!!! Ours kicked in at placement/entrustment which happened 4 days after Kayleigh's birth - we were told when we got the call about Kayleigh (as she was a BOG who was admitted to the NICU) that it would be a private pay case (i.e. we would be responsible for all medical bills). I guess I just never realized that some companies offered insurance to employees that would take effect at birth (for adoption) - HUGE kudos to those companies (as I'm assuming that's a decision made by HR (Human Resources) on whether or not to select that option when they're shopping for insurance coverage for employees). I hope those of you who have that kind of coverage write a big letter of thank-you to whomever is responsible for making that call - because that's just a good thing to do for those who are adopting!!

-Lisa

Actually the issue Lisa is one of the law. Several years ago Congress revised several laws, and created HIPAA in which they defined "placement" as the time at which adoptive parents assume fiscal responsibility. Therefore if APs match with a BP before the birth (APs take fiscal responsibility when they match) they should be able to argue with their insurance company that coverage should start at birth. We never used this provision because we have a BOG (our sweet dear blessing on the ground). The cites for the specific section of the law, and the definition of "placement" are in one of the quoted sections above. I am happy to talk with anyone about this if anyone wants to PM me.

Good Luck! Susan

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Wow Susan - thank YOU so much for clarifying the interpretation and doing all that legwork - this was just far too beneficial/valuable to not copy it here so that if someone who is looking into the insurance thing finds this thread, they'll be sure to see your post.

Anyway, thanks!!

Lisa

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Hi Susan,

I agree, great legwork on this insurance stuff.

I wonder though if being matched with (birth)parents prior to the birth would really matter to the insurance company since this is only a promise, not a legal agreement. Legally relinquishment and placement cannot occur any earlier than 48 hours after the birth of the baby (in Texas).

Which in turn makes Medicaid that much more confusing...because if a (birth)mother is fully eligible for medicaid for the birth of her baby (and she has applied for it), then that coverage should not be denied, even if an adoption plan is made (48 hours) later.

Karen

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I guess this is all very hypothetical but I'm also wondering if one couldn't then argue about making the coverage retro-active to birth once placement happens...and if placement doesn't happen, then obviously one wouldn't be filing insurance claims for the birth expeneses anyway?

Well, anyway - it's definitely worth trying to work it out with one's insurance company because as Elizabeth pointed out to Susan in one of her posts under the 10-4's thread:

Go, Susan!!! Amazing, isn't it, how we all pay our insurance premiums and/or our taxes to cover the costs of insurance/Medicaid but then have to go to outrageous lengths to prove that we're entitled to the very thing we've been paying for all this time?!

-Lisa

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Lisa, first let me say another thank you for consolodating this information. While (IMO) it can still be a bit intimidating or a little hard to follow as these posts have people from different states, different companies, and different insurance providers, it is still very nice to have a single source to gain some good knowledge.

Per my conversations with my medical insurance provider, Methodist Health Care, once I receive the court document for the placement, I have 30 days to file a "Life Event" and the medical coverage will be retroactive to the time of birth. So, matching has no effect on us as those expenses are between us and whatever medical coverage the birthmother has at the time. But upon placement, we should be fully covered.

This raises a question. So, even though I may responsible for medical bills if Medicaid is not in effect or if she does not have private insurance, will I be able claim those medical expenses on my tax return for the year since upon the placement the baby becomes my dependent? I would think so, just wondering for those of you who have had experience in this area. I know your medical expenses must be like 6.5% or more of your AGI (adjusted gross income), but a delivery could add a big chunk of expense to your annual medical bills.

-A

Edited by Adam & Beth
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This raises a question. So, even though I may responsible for medical bills if Medicaid is not in effect or if she does not have private insurance, will I be able claim those medical expenses on my tax return for the year since upon the placement the baby becomes my dependent? I would think so, just wondering for those of you who have had experience in this area. I know your medical expenses must be like 6.5% or more of your AGI (adjusted gross income), but a delivery could add a big chunk of expense to your annual medical bills.

Adam -- Let me preface my reply by stating that I am no accountant or tax specialist (just a "retired" labor-and-employment attorney), but I think I can offer some guidance. I do not believe you will be able to claim the birthmother's medical expenses on your tax return (i.e., the labor & delivery charges, etc.). Although you assume responsibility for the birthmother's (and baby's) medical expenses through Abrazo, the birthmother most likely does not meet the IRS' definition of a dependent since she doesn't live with you and hasn't been your financial responsibility for an appropriate amount of time under their guidelines. Again, though, these are just my thoughts ... I'd definitely check with your accountant to be sure.

Edited by FeelingBlessed
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This raises a question. So, even though I may responsible for medical bills if Medicaid is not in effect or if she does not have private insurance, will I be able claim those medical expenses on my tax return for the year since upon the placement the baby becomes my dependent? I would think so, just wondering for those of you who have had experience in this area. I know your medical expenses must be like 6.5% or more of your AGI (adjusted gross income), but a delivery could add a big chunk of expense to your annual medical bills.

Adam -- Let me preface my reply by stating that I am no accountant or tax specialist (just a "retired" labor-and-employment attorney), but I think I can offer some guidance. I do not believe you will be able to claim the birthmother's medical expenses on your tax return (i.e., the labor & delivery charges, etc.). Although you assume responsibility for the birthmother's (and baby's) medical expenses through Abrazo, the birthmother most likely does not meet the IRS' definition of a dependent since she doesn't live with you and hasn't been your financial responsibility for an appropriate amount of time under their guidelines. Again, though, these are just my thoughts ... I'd definitely check with your accountant to be sure.

I think you are correct, Feeling Blessed. Also, the baby would not qualify as your dependent until legal placement, which cannot occur until after the birth. However, the medical expenses would be included in total adoption expenses if you are eligible for the adoption tax credit. As always, check it out with a tax professional.

Karen

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Which in turn makes Medicaid that much more confusing...because if a (birth)mother is fully eligible for medicaid for the birth of her baby (and she has applied for it), then that coverage should not be denied, even if an adoption plan is made (48 hours) later.

The Medicaid stuff is getting significantly harder to negotiate, what with recent federal budget cuts that are tightening the rules on what gets paid by whom and when. I've been researching this lately in an effort to "break the logjam" that's been occurring lately in cases that cannot be finalized in a timely manner because there are astronomical bills for which Medicaid coverage is being denied or having to be refiled again and again. Here's some of what I'm finding...

At the website of Centers for Medicare & Medicaid Services, see Third Party Liability, which underscores the "alternative source of payment" argument doctors and hospitals frequently use to argue that the adoptive parents/adoption agency should be charged all medical costs related to the birth of a baby who is placed for adoption. See also Mandatory Eligibility Groups, where it specifies that an infant born to a Medicaid-eligible mom only remains eligible for coverage under her policy "throughout the first year of life so long as the infant remains in the mother's household." (Since relinquishment terminates her legal relationship with her baby, it stands to reason that any Medicaid coverage for that child ends at that point, as well, which is why adopting parents must be prepared to cover the medical bills incurred on behalf of their baby, whether or not their insurance provides coverage from birth or from placement.)

Adoption agencies have no way of predicting (1) how much hospital bills may run, nor (2) what insurance will or will not cover, nor (3) how long it may take for Medicaid/insurance claims to be processed after the discharge/placement has been done. But as Angela was saying yesterday, this makes it that more crucial that all adopting families be fully aware of the potential bills they might face should insurance deny coverage after the fact. We do try to emphasize in orientation that there are no guarantees, and that's why our estimates include all anticipated medical costs (regardless of the birthparents' Medicaid status). But it's up to each family to know their limits and to have a Plan B, if faced with catastrophic expenses for which there is no coverage (just as they would if they had birthed a biological child for whom the bills exceeded available coverage.)

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This raises a question. So, even though I may responsible for medical bills if Medicaid is not in effect or if she does not have private insurance, will I be able claim those medical expenses on my tax return for the year since upon the placement the baby becomes my dependent? I would think so, just wondering for those of you who have had experience in this area. I know your medical expenses must be like 6.5% or more of your AGI (adjusted gross income), but a delivery could add a big chunk of expense to your annual medical bills.

Adam -- Let me preface my reply by stating that I am no accountant or tax specialist (just a "retired" labor-and-employment attorney), but I think I can offer some guidance. I do not believe you will be able to claim the birthmother's medical expenses on your tax return (i.e., the labor & delivery charges, etc.). Although you assume responsibility for the birthmother's (and baby's) medical expenses through Abrazo, the birthmother most likely does not meet the IRS' definition of a dependent since she doesn't live with you and hasn't been your financial responsibility for an appropriate amount of time under their guidelines. Again, though, these are just my thoughts ... I'd definitely check with your accountant to be sure.

Thanks.

First, I understand the disclaimer perfectly (and the need for them -- I would do the same thing).

I agree 100%. I am certain you could not deduct the birthmothers medical bills as she is not a dependent. Those fees would be applicable towards adoption expenses that you could file for the adoption tax credit, but the agency fees alone take care of most of that credit amount.

I was mentioning that not only would the baby's expenses be applicable towards the adoption tax credit, but since the baby will be a dependent upon placement, I would think those fees would also be applicable towards your medical expenses that can be claimed should you meet the expense vs AGI requirement.

-A

I think you are correct, Feeling Blessed. Also, the baby would not qualify as your dependent until legal placement, which cannot occur until after the birth. However, the medical expenses would be included in total adoption expenses if you are eligible for the adoption tax credit. As always, check it out with a tax professional.

Karen

I see and that makes sense. So, no "double dipping" there regarding medical vs adoption tax credit. :) I wasn't thinking it all the way through. I was using the mindset of insurance coverage and retroactive coverage versus when the government determines the baby is your 'dependent'.

Edited by Adam & Beth
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Which in turn makes Medicaid that much more confusing...because if a (birth)mother is fully eligible for medicaid for the birth of her baby (and she has applied for it), then that coverage should not be denied, even if an adoption plan is made (48 hours) later.

The Medicaid stuff is getting significantly harder to negotiate, what with recent federal budget cuts that are tightening the rules on what gets paid by whom and when. I've been researching this lately in an effort to "break the logjam" that's been occurring lately in cases that cannot be finalized in a timely manner because there are astronomical bills for which Medicaid coverage is being denied or having to be refiled again and again. Here's some of what I'm finding...

At the website of Centers for Medicare & Medicaid Services, see Third Party Liability, which underscores the "alternative source of payment" argument doctors and hospitals frequently use to argue that the adoptive parents/adoption agency should be charged all medical costs related to the birth of a baby who is placed for adoption. See also Mandatory Eligibility Groups, where it specifies that an infant born to a Medicaid-eligible mom only remains eligible for coverage under her policy "throughout the first year of life so long as the infant remains in the mother's household." (Since relinquishment terminates her legal relationship with her baby, it stands to reason that any Medicaid coverage for that child ends at that point, as well, which is why adopting parents must be prepared to cover the medical bills incurred on behalf of their baby, whether or not their insurance provides coverage from birth or from placement.)

Adoption agencies have no way of predicting (1) how much hospital bills may run, nor (2) what insurance will or will not cover, nor (3) how long it may take for Medicaid/insurance claims to be processed after the discharge/placement has been done. But as Angela was saying yesterday, this makes it that more crucial that all adopting families be fully aware of the potential bills they might face should insurance deny coverage after the fact. We do try to emphasize in orientation that there are no guarantees, and that's why our estimates include all anticipated medical costs (regardless of the birthparents' Medicaid status). But it's up to each family to know their limits and to have a Plan B, if faced with catastrophic expenses for which there is no coverage (just as they would if they had birthed a biological child for whom the bills exceeded available coverage.)

Elizabeth,

Is it possible to take a short-term plan that only covers the baby from birth to the 'legal adoption'? Our plan states that the child is only covered once they are 'legally adopted'. However, they also say that if it is in the court order that they must cover the child from the date of birth then they will also consider that fact. We want to cover our bases of course and not be left un-insured for the baby's inpatient stay.

Thanks a lot for your insight! Nichole

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Hmm... Nichole, I'm not any kind of insurance expert, but I'm not aware of any "temporary" coverages like that. However, I don't think federal law allows insurance companies to withhold coverage until finalization any longer (since adoptions aren't necessarily finalized until 6-18 months after placement, and that's the first time any court order is issued on behalf of the adopting parents.)

My understanding is that when Clinton was in office, he signed into law something that requires all insurance companies to cover babies being adopted from time of placement, so as to prevent discrimination against adoptive families, for whom dependents would otherwise qualify for coverage from the start if they were the biological offspring of the insured.

Anybody out there know any better answers to these questions? Feel free to jump right in!

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My understanding is that when Clinton was in office, he signed into law something that requires all insurance companies to cover babies being adopted from time of placement, so as to prevent discrimination against adoptive families, for whom dependents would otherwise qualify for coverage from the start if they were the biological offspring of the insured.

Anybody out there know any better answers to these questions? Feel free to jump right in!

Yes, you are right Elizabeth. Congress amended the Employee Retirement Income Security Act (ERISA) in the mid 1990s (when they passed the Health Insurance Portability and Accountability Act (HIPAA) in 1996) to require group health plans to cover adopted children at placement. Group health plans are not allowed anymore under federal law to withhold coverage until finalization. Not all personnel with group health plans know that, but the relevant section in ERISA clearly state that coverage starts from placement. If someone has health insurance with something other than a group health plan, maybe there is a loophole (if the company does not have to follow federal law) but I am not aware of this instance.

The cite is ERISA is Title 29, Chapter 18, Subtitle B, part 6, Section 1169, c, 1

I am happy to help anyone with this if you want to PM me.

Susan

Edited by Susan
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The cite is ERISA is Title 29, Chapter 18, Subtitle B, part 6, Section 1169, c, 1

Susan

I'm sorry, but this information is kind of vague as to what it is and where I can find it , could you please be a bit more specific? ;):P:lol:

I'm Just kidding of course. Excellent information and thanks for the citation.

Thank you Susan.

-A

Edited by Adam & Beth
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If someone has health insurance with something other than a group health plan, maybe there is a loophole (if the company does not have to follow federal law) but I am not aware of this instance.

Susan

Yep - unfortunately, that was us. We tried using the info you provided Susan, but then after all this ragamarole, we were finally told something to the effect of our plan (through our state) is self funded and so was also self-regulated -- I'm fuzzy on the details now, but we were trying to argue the point of, if we are matched, we are fiscally responsible at the time of BIRTH, not PLACEMENT. We really just wanted to be protected in the case of a NICU stay prior to placement, etc. But w were told they didn't have to play by those rules.

We did end up with coverage from placement, but ran into an insurance hassle anyway. PIWs beware: although we were covered, we were out of our coverage area (state) when we took placement. The hospital wanted the baby to be checked in a week and made an appt at their clinic. When we went to that, they also wanted the 2nd PKU test done in state, and it was 1 day too early to do that 2nd test, so we had to go back the next day. So -2 clinic appts. Well - our delirious, sleep-deprived, living-in-a-hotel-room-out-of-state brains didn't even think to ask for prior approval - so although we had coverage retro to placement, those visits weren't covered because they were out of network and we hadn't gotten prior authorization. I appealed, but it didn't help.

Just my story and a little warning.

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