Parents hit with $270K medical bill over 'birthday rule' inspire changes

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In January, a Kansas couple shared the story of how they received a $270,951 medical bill after the birth of their first child — even though they're both insured. Now, a state representative is proposing legislation to ensure stories like theirs don't happen again.

There is a little-known rule that stipulates a child born with double health insurance eligibility must be enrolled in the plan belonging to the parent whose birthday comes first in the calendar year. This regulation, known as the "birthday rule," was established by the National Association of Insurance Commissioners and adopted by most states.

The rule determines which insurance will be primary for the child and which will be secondary, but premiums, deductibles and networks often vary greatly between both parents' insurance plans, so parents don't always have the option to make the more comprehensive plan their child's primary insurance.

This rule resulted in new parents Kayla and Mikkel Kjelshus receiving a bill from HCA Overland Park (Kan.) Regional Medical Center for $270,951, including $207,455 for an NICU stay. After negotiating with insurers to pay the balance and getting in touch with the hospital, the bill was changed to a zero balance. 

The Kjelshuses' story was covered by several news outlets and caught the attention of state representative Sharice Davids. On July 22, Ms. Davids will introduce the Empowering Parents' Healthcare Choices Act, which would allow parents to eschew the birthday rule.

Her proposed measure would give parents 60 days after their child's birth to choose which parent's insurance will be their primary coverage. If the window passes and no decision is made, the birthday rule would still apply.

"Welcoming a child into your family should be a joyful event, free from undue stress and financial surprises at the hands of insurance companies," Ms. Davids said in a statement. "This is a simple fix that gives parents the power over their baby’s healthcare coverage, so they can make an informed choice about their family’s future."

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