In terms of sheer financial and emotional despair, few can match the feeling of hopelessness that can accompany the unexpected news of serious illness or disability affecting your newborn. On top of the emotional burden, parents of such children in no time may easily face many millions of dollars in health-care costs. Yet many are largely unaware of the multiple public and private safety nets that exist to offset much of the expense.

“Some parents think if they both have jobs and private health insurance, that they don’t deserve help,” said Breanne Riley, a clinical social worker at Children’s Hospital Denver. “That’s not true. But a lot of families have never asked for help before. That can be very difficult for them.”

About 120,000 babies are born annually in the United States with birth defects—a rate of one out of every 33 babies, according to the March of Dimes Foundation. The most common are heart defects, cleft lip or palate, Down syndrome, spina bifida or cystic fibrosis.

“If someone doesn’t have good health insurance, they face significant challenges,” said Bill Lindsay, president of the Benefits Group for Lockton Companies, a Kansas-City-based insurance broker.

“If you have a solid health-insurance plan, you’re in better shape,” Lindsay added. “But the Natal Intensive Care Unit is the most expensive part of any hospital. And with birth defects, often you have multiple abnormalities, not just one.”

The McDonalds

Take the case of Sally McDonald, who gave birth to daughter Maggie 16 years ago in the San Francisco Bay area.

“My child has every disability and medical problem known to man,” McDonald said.

For starters, Maggie has cerebral palsy and hydrocephalus, a build-up of fluid inside the skull, leading to brain swelling. She has a tube in her head that takes the fluid from her brain. She is in a wheelchair. She cannot walk, talk, sit or stand. She wears diapers that must be changed about 10 times a day.

She’s had a feeding tube since the day she was born. Her bladder and bowels do not work properly. She has to be catheterized every three hours around the clock. In 2007, she had to get a tracheostomy tube. So she now breathes, eats and urinates through tubes.

Yet Maggie is 16 years old and lives at home with her mother, who left her law practice to care for her daughter full-time. Husband Steve still practices law, and Maggie has two perfectly healthy older brothers.

“Our income has been cut in half, and will never get back to where it was – you acclimate to that,” Sally McDonald said. “But it’s almost incalculable how much it has cost.”

Between the McDonalds’ private health insurance and the state of California’s comparatively liberal Medicaid policies - known as Medi-Cal - most hospital expenses, drugs and other medical supplies are paid for.

“I’ve seen bills for $500,000 that I have not had to pay,” she said. “It costs $4,800 a month for one drug. I don’t pay that. The incidental, out-of-pocket costs of caring for her cost thousands and thousands annually. I’m happy we have the wherewithal to do that.

“At first, we didn’t even know we could ask for help,” McDonald continued.” The state contacted us. If not for state of California, I don’ know what we’d do. I’ve slowly educated myself about the web of services available. Now there’s the Internet, which wasn’t around when Maggie was born, and it helps immensely.”

(For more information, see Sally McDonald’s blog, “Maggie World.”)

The McDonalds’ case may seem extreme, but it’s not as uncommon as one might think. Elements of their situation provide a cautionary tale for all expectant parents, especially for those who knowingly or unexpectedly bring a disabled child into the world. It’s an expensive proposition, but it’s often more manageable than it first might seem.

Ready or Not

It almost goes without saying that all pregnant women should undergo the battery of tests known as “complete prenatal protocol.”

A woman’s physician looks periodically at the growth of the fetus and takes regular blood tests, looking for hormones or enzymes known as “markers” that can indicate problems.

“If those markers indicate an issue, there are hospitals that specialize in maternal fetal health or high-risk pregnancies,” said Lindsay, with Lockton Cos.

Yet, “it’s fairly common for the parents to be unaware of a problem or situation before it comes up,” said Jann Hodge, case manager at Children’s Hospital Denver. “Many times it depends on their access to prenatal care. Many people still have a hard time accessing our health-care system.”

Added Riley of Children’s Denver: “Some illnesses or special needs can be diagnosed prenatally, but many can’t be. Not everything is caught on ultrasound.”

Plus, you may think you have a healthy baby on the way and there can be various forms of birth trauma in the delivery room, or premature birth and resultant low birthweight, Hodge said.
Her advice for expectant parents: “Plan for the worst, hope for the best.”

Delivery Room

If prenatal testing has uncovered any fetal abnormalities, efforts usually will be made to have the baby delivered at a hospital equipped to handle the specific malady. A number of hospitals around the country specialize in treating different infant maladies such as spina bifida, cleft palate or cystic fibrosis. Often, these so-called “centers for excellence” belong to the network of Children’s Hospitals, which provide specialized care for infants with a wide variety of pediatric specialists. If abnormalities are unexpected, a newborn may be transported to such a hospital immediately.

“Many at-risk births from elsewhere end up here,” said Hodge of Children’s Denver. “Most hospitals don’t have the facilities to take care of high-risk newborns.”

Some infants need immediate organ transplants, for instance.

“We do heart and liver transplants here,” Hodge said. “We have a high population of infants with cardiac risk.”

If a child needs a lung transplant, he often is sent to St. Louis Children’s or Texas Children’s in Houston, Hodge added. Infant bowel transplants end up at the University of Nebraska Medical Center.

The First Few Days

Lindsay described the immediate aftermath of such a birth.

“When mom delivers, there is a rapid response team present to take tests and determine therapies immediately,” he said. “And to determine if the baby needs to be transported anywhere. Science has evolved to the point where tests they do very often determine whether a child would benefit from immediate surgery. If it is determined that a transplant is likely, as soon as the child is born, he is immediately taken to surgery and put on life support until a donor is available. Those first few minutes can determine survival.

“One challenge of having a child born with serious birth-related deformities, illnesses or whatever else,” Lindsay said, “is that the child needs a significant amount of diagnostic testing, which is very, very expensive.

"The child may need repeated surgeries throughout its lifetime, he added. “A high-risk newborn, before he or she is stabilized, may need 10-12 surgeries.”

Maggie McDonald has had 75 surgeries in 16 years - 20 in her first year, Sally McDonald said.
And taking a child to a center for excellence is typically not covered on most health-insurance policies, Lindsay said. “Transportation for the child might be covered, but not for the parents. Hotels, meals typically aren’t covered.”

But the centers for excellence usually have affiliations with agencies, such as the Ronald McDonald Foundation, that allow the family to stay close at low cost, even for extended stays.
“If they live more than 60 miles away, the Ronald McDonald House nearby will get them a room for $20 per night,” Riley said. “Sometimes Medicaid covers it, but that differs from county to county.

“The Ronald McDonald people don’t want finances to keep a family from their child,” she added “Many families are flown in here and don’t have ground transportation. They offer a free shuttle to and from the hospital, free meals.”

Riley and Hodge are part of a case management team at Children’s Denver that helps a family deal with such expenses.

“We meet with all of the family members, do an assessment of their needs,” Riley said. “Where are they staying? What are you doing for transportation? Do you have enough money for food? A lot of the families here come from other states.”

Most families, in the first few days after birth, are not thinking finances at all, she added. “A lot of families will need longer-term support when they go back home, and we help connect them with community resources.”

Many hospitals have March of Dimes representatives who provide a lot of education for parents of ill newborns, Riley added.

“A lot of these families live from paycheck to paycheck,” she said. “In a crisis situation, dad and mom have to take time off from work. When babies are born prematurely, the parents are deprived of the few extra months they’d been planning on to save up for baby supplies. In order to spend precious time with their child, they miss work and fall behind on bills. If they lose their jobs as a result, they need to know what their COBRA options are.”

Case Management

The most important thing for parents facing these circumstances to do - even if they have excellent health insurance - is to call the insurance company immediately and ask to be involved in case management, Lindsay said. Case management is a process all insurers use when dealing with complicated and potentially expensive cases, he added.

“It brings the company's medical director, nursing assistance resources, and claims personnel together so that the patient is ensured of the best care while costs are managed.”

Hospitals, in turn, often have their own case management teams.

“They mirror each other,” Lindsay said. “Most large facilities have their own case management staff, so they can respond to the insurers. In these hospitals that have the most complicated cases, they are used to dealing with such matters. Smaller, less specialized hospitals may not have the staffing to provide this.”

Lindsay warned that these are "push-and-shove" situations, with the insurer wanting to control cost and the hospital wanting to ensure its costs will be paid for.

“There is no good-guy or bad, just different perspectives,” he said. “The key question is whose interests do they have in-mind? Hopefully, they are aligned and focused on the patient.”

Hodge offers similar advice for parents about the hospital’s own case management team

“Connect with the social worker in charge of case management at your local hospital,” she said. “They are the people most informed about what’s available. Find out who’s in charge of financial counseling and who’s the community resource liaison.”

Working with a health insurer’s case management staff allows parents to have close interaction with the people inside the company who handle benefits and can answer questions what things are going to be covered or not once a child is discharged from the hospital.

As of Sept. 23, 2010, because of the new health care reform law, insurance companies can no longer cut off policy holders when their medical expenses reach a lifetime limit. For instance, 16 years ago when Maggie McDonald was born, the family nearly used up the $1 million lifetime cap on her insurance in her first year.

Now there is no such limit.

“Removal of the lifetime maximum is a very, very significant benefit to people,” Lindsay said.

Medicaid, SSI, Foundations, Community Agencies

Each state distributes federal Medicaid funds somewhat differently, but a disabled infant should qualify for the program, which picks up most – but not all – hospital and medical costs.

It’s typical for a middle-income family to have “some, but not much health insurance,” Lindsay said. “In that case, get the infant to qualify for Medicaid, so you’re not uncovered.”

Another government safety net for parents is Supplementary Security Income. Monthly payments to families of disabled children are administered by the Social Security Administration, but the money doesn’t come from Social Security taxes or trust funds. The income payments are financed by general revenue funds from the U.S. Treasury.

Each state has its own rules and regulations regarding who is eligible to receive SSI.

In the case of premature births, if the birthweight is below certain thresholds, Social Security will pay SSI benefits immediately, while awaiting a decision from the state Disability Determination Service.

If an infant displays obvious symptoms of blindness, deafness, cerebral palsy, Down syndrome and muscular dystrophy, Social Security considers them “presumptively disabled” and will initiate monthly payments for up to six months while awaiting an official medical ruling from the state.

“The government safety net is very slow,” cautioned Stephanie Benitendi, director of patient access at Children’s Hospital Denver. “Things that are supposed to take 45 days can take 90 days. Nonetheless, we’ve never seen anyone we haven’t been able to help, to get them into state or federal programs.”

And remember to cast a wider net, as the case workers point out there is more than just government assistance available to parents in these trying situations.

“If for some reason, the family is not eligible to Medicaid or SSI, we can tap into a lot of local resources or agencies in the community for food, lodging, transportation,” said social worker Riley. “Children’s has a foundation that is supported in part by donations from parents who had children here in the past. And we can connect families with foundations that have been set up to care for children with different problems such as Downs’ Syndrome or blindness.”

Often there are studies under way that may offer to waive or abate some charges a normal patient would pay in exchange for having a child in such program.

“Always try for clinical trials,” Lindsay said. “They need patients to study.”

The federal government, in some cases, now allows severely disabled children to be cared for at home and still be eligible for Medicaid. In most cases, it is far cheaper for all concerned than paying for hospitalization.

The McDonalds have cared for their daughter Maggie at home for years, with nurses and other medical services reimbursed by Medicaid.

“Maggie brings such joy into our lives that I cannot possibly describe it,” said Sally McDonald. “She is a great lesson in looking at the cup half full, both for us and for her older brothers. Our life is hard and different than others, but it is extremely rewarding. Still, the strain is enormous, financially, emotionally, socially and in every other way.

“I tell people the water in my glass may be tilted because our life is out of balance,” McDonald added. “But the glass is definitely still half full, and it's only half because we drank the rest.”