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The Goodman Institute Health Blog

Babies Aren’t Cheap (even with good insurance)

Posted on July 25, 2022July 26, 2022 by Devon Herrick

A new report from the Kaiser Family Foundation found that out-of-pocket costs for childbirth run nearly $3,000 for insured women in large group plans. Out-of-pocket costs represented about 15% of the average cost for pregnancy, childbirth, and post-partum care, which were nearly $19,000 on average. This was supposedly a travesty.

Pregnancy is one of the most common reasons for a hospitalization among non-elderly people. In addition to the cost of the birth itself, pregnancy care also involves costs associated with prenatal visits and often includes care to treat psychological and medical conditions associated with pregnancy, birth, and the post-partum period.

The frequency and intensity of services associated with pregnancy and childbirth can lead to considerable out-of-pocket expenses for new parents, particularly those covered by private insurance.

For vaginal deliveries the total cost for women in large group plans was $14,768, while cost-sharing was $2,655. Cesarean deliveries (which many experts believe are often for the doctor’s convenience) averaged $26,280 with $3,214 in cost sharing.

A government report from two years ago (NCHS Data Brief) found that Medicaid is the source of payment in about 42% of births. Just under half of states (21) cover home birth deliveries under Medicaid. Without insurance coverage, home birth deliveries run $3,000 to $9,000.

The figure is now many years old but Parkland Memorial, the Dallas County hospital that delivers more babies than any other in the nation, used to quietly offer a package deal to mothers willing to pay of about $2,500. I have been unable to find the current figure. A Castlight Health survey from a few years ago found labor and delivery varied widely across the country, costing $15,204 in San Francisco but only $6,075 in Kansas City.

It should come as no surprise that childbirth comes with considerable costs. People go into debt for many things far less valuable than bringing children into the world. On the other hand, it sort of makes you wonder how labor and delivery became a medical procedure rather than a natural one.

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For many years, our health care blog was the only free enterprise health policy blog on the internet. Then, when the NCPA closed its doors, the health blog stopped as well.

During this five-year hiatus no one else has come forward to claim the space. So, my colleagues and I have decided to restart the blog in connection with the Goodman Institute. We invite you and others to use this forum to share your views.

John C. Goodman,

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