Colorado "Birthday Rule" creates coverage confusion for new parents

Most parents assume they get to choose which health insurance plan covers their newborn. For one family, that wasn't the case. A little-known Colorado rule turned their son's NICU stay into months of confusion, threatening letters and hundreds of thousands of dollars in disputed medical bills.

"He's the happiest baby I've ever seen," Megan Peer said.

Today, 9-month-old Benjamin Perr is thriving. But his parents say the months following his premature birth were some of the most difficult of their lives.

"I think I was in shock at first. I was devastated," Megan Perr said. "It was very traumatic overall -- not being able to hold him at first and just the fear of what the future was going to hold."

Last August, Megan Perr developed severe preeclampsia while temporarily living in Colorado. Doctors at UCHealth delivered Benjamin at just 30 weeks after her condition suddenly worsened

Benjamin spent weeks in the neonatal intensive care unit. While focused on their son's survival, his parents also worked to ensure his medical bills would be covered.

"We knew it was going to be complicated and expensive, so we tried to be proactive and avoid insurance issues," Jonathan Perr said.

Within days of Benjamin's birth, the couple added him to Megan's UnitedHealthcare plan. They received confirmation he was covered, and hundreds of thousands of dollars in NICU bills were initially paid.

Months later, those payments were reversed.

"They started calling and texting me every day about these bills," Megan Perr said. "At first, I ignored them because I had no reason to think there were any problems."

After weeks of phone calls, the couple learned Colorado's so-called "birthday rule" had automatically made Jonathan's insurance plan, Anthem, the primary coverage. The rule is based on which parent's birthday falls earlier in the calendar year -- not age and not the family's selection.

Jonathan Perr's birthday is June 6; Megan's is June 20.

"No one told us this -- not once -- until six or seven months later," he said.

The situation became more complicated when Anthem denied the claim, saying it did not have medical records for Benjamin. Nine months later, the family was still trying to resolve the issue.

"I've probably had more than 100 phone calls at this point," Megan Perr said.

The birthday rule applies when both parents have separate insurance plans that could cover a child. The Colorado Division of Insurance says the policy is designed to prevent parents from being caught between two insurers disputing who should pay.

"There just needs to be transparency that this exists," Megan Perr said.

They say the biggest cost wasn't financial -- it was the time spent dealing with billing disputes while caring for their newborn.

"It takes away from the limited time we have with our son," she said. "That's the most unfair part. It causes stress between us, and we're being threatened with a $400,000 bill."

The family hopes sharing their experience will help others avoid a similar situation.

"I just don't want this to happen to another family," Megan Perr said.

Anthem said it received the necessary medical records this week and plans to resolve the issue soon.

Meanwhile, the Colorado Division of Insurance says it is reviewing the regulation to determine whether parents could be allowed to choose a plan during the first 30 days of a newborn's life and whether other states have adopted that approach.