Does your maternity cover leave you with surprise bills? Here’s one plan to fix it

Have you received multiple, unexpected bills during your pregnancy, sometimes by text message just hours before a procedure? You’re not alone.

Each year, about 70,000 Australian women give birth in the private system. Many are hit with surprise costs, often with no clear explanation or upfront discussion. Some women may be afraid to question unexpected charges, fearing it could delay care and put their own or their baby’s health at risk.

There has to be a better way.

Now private health insurers have a plan to provide pregnant women with more certainty about the out-of-pocket costs for scans, blood tests and the like. The idea is to provide a “bundle” of maternity care that you pay for up front as a fixed cost.

In a submission to the Productivity Commission, Private Healthcare Australia, which represents most funds, outlines how this would work. But the commission’s interim report into delivering quality care more efficiently, which was out earlier this week, does not mention bundled payments for private maternity care.

We’re two health economists with a special interest in women’s health. Here’s why we believe bundled maternity care could help take the stress and financial guesswork out of having a baby.

The high cost of pregnancy

Our research shows that, on average, women had 11 outpatient visits and accessed 39 out-of-hospital services throughout pregnancy. These include GP and specialist consultations, scans, therapies and tests. Each of these services may incur out-of-pocket costs, and none is allowed to be covered by private health insurance.

These add to average out-of-pocket costs of A$4,285 for women giving birth in the private system.

Private maternity care can deliver outstanding outcomes. Yet the rising and unpredictable out-of-pocket costs may be a key factor to the decline in the proportion of women choosing to give birth in the private system. That not only affects those women. Moving away from private maternity care also adds pressure to our already stretched public health system.

Here’s an example of the types of costs we’re talking about. The image below shows an actual fee schedule that women received at their first private obstetric appointment.

This gives women a clear estimate of fees charged by the specialist obstetrician. Additional services, such as scans, blood or urine tests, anaesthesia, or care for the newborn may incur further costs. But the fee schedule provides no details of how much these might be.

What do private health insurers propose?

Private Healthcare Australia is calling for major reform in how maternity care is funded in the private system, called “a bundled payment”.

Think of it like a travel package, but for your entire pregnancy. Instead of receiving separate bills from multiple health-care providers, you would pay one fixed price that covers all your pregnancy and birth-related care. No surprise bills. No confusion. Just one agreed cost, up front.

Women would choose a lead practitioner, such as an obstetrician, midwife, or GP, who coordinates all necessary services and handles payments to other providers. In return, women receive a single invoice covering everything from initial consultation to postnatal care.

In cases where births are complex and require additional services beyond the standard package, lead practitioners could charge more, but only under strict conditions, and with full disclosure. This helps maintain flexibility while still setting clear expectations up front.

What else can we expect?

Clinicians, including obstetricians, midwives, and GPs would be able to join the bundled care scheme by offering full-service packages to women. They’d collaborate with other health-care providers to deliver care and share funding.

This could spark healthy competition, where providers offer packages with clear pricing and service options. The aim would be to offer women more choice, better value, and improved care coordination.

Bundled care could be a win for the public health system too.

To support the reform, Private Healthcare Australia is proposing both private insurers and the Australian government contribute a minimum of $3,000 each to the lead clinician, covering coordination tasks and helping reduce out-of-pocket costs for families.

Rolling out this funding model would cost the government $246 million over four years. This is far less than the roughly $1,851 million it may otherwise face over the same period if these women shift from private to public maternity care.

Not everyone agrees this would work

However, not all health-care providers are on board. Earlier this year, the Royal Australian and New Zealand College of Obstetricians and Gynaecologists questioned whether bundled maternity payments would really save women money. It said the lead provider of maternity care would bear the burden of indemnity responsibility for all services within the bundle, making the service prohibitively expensive to provide and so unlikely to be financially viable.

However, we’d argue that the payment to the lead provider should be set in consultation with health-care providers to ensure it adequately covers any additional legal liability and coordination burden.

The out-of-pocket costs may still be significant under this funding model. But it would give families greater certainty about fees and more confidence in planning for a baby.

If clinicians’ concerns about legal liability and other practical issues can be managed, this type of reform could make private maternity care a more realistic option for more families.