What to expect: how to budget for the cost of having a baby

Cost isn't what people think about when they are having a baby. It's an overwhelmingly emotional time.

But it's better not to overlook the nitty gritty of having a baby and all the possible contingencies. The last thing you want is a nasty financial shock.

At the top of the list is sorting out your health insurance.

When you are single, you may not bother taking it out, or you sign up for a low-cost policy with plenty of exclusions because you are healthy. But a baby changes all that.

A few years before they had a baby, Vanvisa and Callum Brown took out health insurance, never expecting there would be any issues.

Even when they were having a tour of the hospital in preparation for the birth, when they were shown the special care nursery Vanvisa said to her husband they were never going to use it. But she was wrong.

Their baby Esme spent two weeks in the special care nursery, which cost $10,000. Luckily their health insurance paid the whole amount.

Vanvisa says she tells her friends it is so important to have the right health insurance.

She admits that she didn't shop around for the best policy at the best price but recommends people do it.

A recent report found that the average cost of out-of-hospital obstetric treatment or visiting an obstetrician in their rooms before or after the birth has skyrocketed.

According to new research from Emily Callander, at James Cook University, visiting an obstetrician will cost you 1000% more than it did 25 years ago.

For in-hospital obstetric care, average out-of-pocket costs jumped by 77%.

After adjusting for inflation, the 1992-93 out-of-pocket charge for out-of-hospital obstetric services was $23.35. In 2016-17, the average cost had risen to $265.

The 1992-93 in-hospital charge was $442, rising to an average of $782 in 2016-17. These are averages, so you could pay a lot more if your obstetrician charges much more.

"There is a strong need across all the medical professions for greater transparency of fees, allowing patients to make use of the free market system and choose providers based on value," says Callander.

As well as the obstetrician, you will also pay for a radiologist (who provides ultrasound and other imaging services), possibly an anesthetist, pathologist and other clinicians and, if you need surgery, other specialist consultations and an assistant surgeon.

Do some research on the costs and what is covered by Medicare and your health insurer. You may find that there are some big gaps you need to fund.

You don't want to get caught out. For example, although your private health insurance covers you for the hospitalisation for childbirth, the antenatal care provided during pregnancy as an outpatient is not covered.

Andrew Cottrill, medical director of private health insurer HCF, says some members have experienced out-of-pocket expenses of several thousand dollars for this.

"The overall medical expense of having a baby can vary widely dependent on your unique situation, including the hospital you choose, what kind of birth you plan to have, if your plan includes hospital excess, and your gap considerations," he says.

If you're planning a baby, HCF's Andrew Cottrill recommends:

- Pregnancy and birth-related benefits: Make sure your insurance cover includes a benefit for pregnancy and birth-related services at least 12 months before you fall pregnant.

- Family insurance plan: transfer your single or couples plan to a family plan two months or more before the birth.

- Birthing complications: if you anticipate your pregnancy may be high risk or include birthing complications based on family history or professional medical assessment, check your plan to ensure it does not have any restrictions that may limit your ability to get the hospital treatment you will need, such as post-operative surgery or a longer hospital stay. For example, plans that provide minimum benefits may exclude cover for neonatal intensive care unit (NICU).

- Ambulance cover: optionally, you should also consider ambulance cover in case you go into labour unexpectedly and need to get to hospital quickly.

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