Childbirth represents a large financial strain
November 13, 2024
Source: Allen, et al Milbank Quarterly, November 5, 2024
Having children is expensive! The average delivery costs over $18,000, and average out-of-pocket costs for those on employer-sponsored health plans are almost $3,000. There are other financial strains caused by childbirth; many who have children take parental leave, which is often unpaid, and many with babies earn less due to decreasing their work hours.
Researchers reported this week on data from two federal surveys of those delivering childrento assess impact of childbirth on household finances. The researchers looked at members on Medicaid and those on commercial insurance. I’ll focus this post on survey responses from about 3,000 commercial members who gave birth from 2021-2022.
Over half (55%) of those with income below 200% of the Federal Poverty Level (income of about $62,000 for a family of four) paid more than $1,000 for expenses of childbirth, and over a quarter (28%) paid more than $1,000 for medical care in the year after delivery. More than half (52%) expressed worry about paying medical bills, and over one in six (17-18%) said they had medical debt in collection a year after childbirth.
Implications for employers:
Employers can evaluate their plan designs to seek to decrease cost sharing for pregnancy and childbirth, although Internal Revenue Service constraints limit waiving of cost sharing within high deductible health plans (HDHPs).
HDHPs often leave low-wage workers and their families underinsured and can lead to financial insecurity.
Some low-wage employees and dependents might be eligible for Medicaid, which could cover out-of-pocket costs that are not covered by commercial health plans. Employers can encourage and prevent stigma around Medicaid enrollment for those eligible.
Employers can review affordability of their health plans in general, with special attention to how cost sharing at the point of service impact low wage workers.
Medical debt in collection can seriously impact employees’ credit scores or cause bankruptcy. Evaluate what resources can be available to employees who are experiencing this level of financial strain.