Sorry John that your daughter has put you in this situation. It sounds like she has been quite the rebel. Do you sense that this major change in her life has "woken her up any"? Being on your insurance fixes the most urgent issue of care for your daughter and her baby during the pregnancy. Once the baby is born is the baby then covered by your medical insurance?
The baby has a father and he needs to be responsible for what he has created. That may be easier said than done but once paternity is established, I would think your daughter would want to pursue some child support. That of course sounds like it would involve legal expense at this point.
You also have the issue of protecting your current family. If your daughter were to begin "growing up" and accepted responsibility and care for her baby, then moving in with you and your family might be ok, but still a stress and hardship given you having a young second family yourself.
As much as things kinds of things seem like "the end of the world" they aren't. As you've already seen in this thread, your daughters situation, although unfortunate isn't uncommon.
Take it day by day. Work with your daughter and see how things progress over time. Your daughter does need to understand however, that whatever she thought her life was before, it's different now.
It may also be helpful to seek out some support or help on this. Your company health benefits or your community may provide some counseling or support on how you and your daughter should proceed.
As a father of a two-year-old daughter, this thread terrifies me! Unfortunately, I don't have a basement!
There is some excellent advice already in this thread, so there really isn't anything meaningful I could add especially as I have not had any experience with this kind of situation, but as parents our main obligation to our children is our love and support. We can only hope that this will be enough and that our children accept it, and that we can live with the decisions they make, no matter how far off they are from our own.