Legislation filed to eliminate cost sharing for maternity services
June 16, 2025
Summary: Bipartisan legislation filed would require employer-sponsored health plans to waive all cost sharing for services related to childbirth.
Having a baby in the United States is expensive! According to the Peterson-KFF Health System Tracker, allowed charges for vaginal deliveries in commercial health plans was $14,768 in 2022, of which $2,854 was paid out of pocket. Cesarean section delivery allowed charges averaged $26,280. Out-of-pocket costs for maternity care averaged $25,280 of which $3,214 was paid out of pocket. Most health plan members exceed their out-of-pocket maximums in the twelve-month period when they have a delivery, but maternity costs are often spread over deductibles in two calendar years.
The high cost of childbirth on commercial health plans can lead to bad outcomes for mothers and their families. Half of single parent households and a third of two parent households do not have liquid assets to cover out-of-pocket costs, and new mothers were almost twice as likely to have at least $250 in medical debt (14.3%) compared to matched women who had not recently had a child (7.6%). Eleven percent of new mothers report medical debt exceeding $1,000. This debt comes at a bad time in young families’ economic life cycle, when many are seeking to purchase a house or increase the size of their home, some decrease their work hours, and most bear new costs of childcare.
A bipartisan group of Senators and Representatives recently introduced the Supporting Healthy Moms and Babies Act, which would require employer-sponsored health plans to waive cost-sharing for all care associated with childbirth (from prenatal visits to postnatal care up to a year after childbirth). This bill would require health insurance plans to treat childbirth just like preventive medicine visits or vaccinations. Employers are not currently allowed to provide first dollar coverage for maternity services for members in high deductible health plans with tax-advantaged health savings accounts (HSAs). The legislators who introduced this bill range from the most liberal to the most conservative in both chambers.
The Niskanen Center, a think tank, estimates that the average cost of waiving cost sharing for maternity services would be about $2.50 per plan member per month (pmpm). Here are the details of this calculation
- There are 1.8 million deliveries per year in private health insurance plans
- There are about 180 million with employer-sponsored health insurance
- This works out to 10 maternity services per 1,000 members per year.
- 10 deliveries/1K members * $3,000 waived cost sharing per delivery) / 1,000 members = $30 per year per member, or $2.50 pmpm.
The cost could be higher for employers with a younger or more fertile workforce, and elimination of cost sharing could lead providers to increase utilization of optional services like ultrasounds, which could further increase the costs.
Implications for employers:
Waiving cost sharing for maternity services would be a valuable financial benefit for many employees of child-bearing age.
The cost of waiving cost sharing for childbirth is surprisingly modest, although might turn out to be higher than this estimate for many employers
This legislation has just been introduced, and it’s not clear that it will gain traction.
Employers currently wishing to waive some or all cost-sharing for maternity services must do this through a plan that does not have a tax-advantaged HSA.
Here’s a link to an article I published in Harvard Business Review (2023) about what employers can do to improve maternal quality and safety.
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6/16/25 note: added the average cost of a Cesarean Sectrion delivery ($26,280) which was initially missing due to an editing error.
Yes, the out of pocket expenses are excessive for a delivery but there might be more than one solution. In Europe there are lower C-section rates, more Midwives giving birth and lower mortality and morbidity rates than the US. An employer with 10,000 members will spend an extra $10 PMPM with a C-section rate of 32% vs 20% (the target that lowers M&M). Perhaps paying more for Midwifery with lower OOP and paying less for OB/GYN delivering a low risk pregnancy with higher copayments. Pregnancy is not a disease - that’s another solution. Let’s promote better care, more valued providers, at lower cost! You can read more about this issue in the blog ‘C-sections - a Risky Business’ at valuebasedpaymentstrategies.com.