All insurance companies have what they call "allowable amounts". This is the maximum they will pay out of their pockets for covered services. Our midwife told us that in AZ insurance companies are supposed to cover Licensed Homebirth midwives as out of network providers under plans that allow one to go out of network for care. When you use in network providers they have contracted with your insurance company and have agreed to provide their services at the allowable amount set by the insurance company. In turn they can't come back and bill you for the difference in the fee, your established co-pay is what you're responsible for. When using out of network providers it gets a bit trickier.
Without knowing what a particular midwife's fee might be here's a rough example:
Say a midwife breaks down her fee into X amount for Y number of prenatal visits, let's say it's 1/2 a $2000 fee. The other $1000 is for the birth and followup postpartum visit.
The insurance company has set their allowable amounts for prenatal visits at $700 and their delivery and postpartum allowable amounts for $850.
If you have a plan that allows you to choose an out of network provider and the insurance company pays 80% you'd assume that you're part of the full fee would be 20% which would translate into $400. (Someone double check all my math here, it's not my best subject). But in reality the insurance company is only going to cover $700 of prenatal care and $850 of the birth and postpartum care for a payout totaling $1550.
Let's say you paid your midwife then submitted for reimbursement. The insurance company will only pay $1550 total for your care and your are responsible for paying 20% of that with an 80/20 plan. That = $310. While that sounds like a great deal, the reality is that you will also have to pay the $450 that the insurance didn't cover because it exceeded their allowable amounts. So you're out of pocket $760 as compared to the $310 you may have been expecting.
It's a tricky situation. We had HealthNet with our last baby and paid $1800 out of pocket for our homebirth midwife's services. We were planning on getting 90% of that back with our 90/20 plan and we only ended up being reimbursed for just over $700 for her services. In reality once it was all said and done we ended up paying around 40% out of pocket and since we transferred we had to pay additional hospital co-pays of $200 per day on top of that.
At least that's my understanding of how this worked when my last baby was born many years ago. To my knowledge not much has changed, but I could be wrong.