One in nine women who recently had babies have medical debt of over $1,000

May 22, 2024

Source: Cox, et al KFF Peterson Institute May, 2024 LINK

KFF published data last week demonstrating that women who have recently had children were almost twice as likely to have medical debt than age-matched women who had not recently delivered. They used data from a survey conducted in 2022. The study found that 1 in 7 (14.3%) had medical debt of over $250, compared to 4.8% of women who had not had childbirth in the past 18 months.

An earlier KFF study showed that the average extra medical costs incurred by women who delivered was $18,865, and the average amount paid out of pocket was $2,854.

Source: Rae, et al KFF Peterson Institute, 2022 LINK

Almost half of childbirths in the US are paid for by Medicaid programs, which have very low cost sharing, so most of this medical debt is from those on commercial insurance. Some of the women who did not have children in the previous 18 months might have had residual medical debt from childbirth of earlier children.

KFF Health News ran a story last week about a husband and wife in Illinois, both teachers, who decided against a second child after facing over $5000 in debt from the delivery of their first child.

People have children at a financially vulnerable time. Many are starting to repay student loans, have credit card debt, have their own chronic conditions. Some have uncertain job prospects, while some want to save for a first home. Most families have both income loss and increased expenses around the time of childbirth, and many do not have the resources to pay many thousands of dollars of out-of-pocket costs for childbirth. However, high deductible health plans with tax-advantaged health savings accounts (HSAs) are required to subject maternity care to plan deductibles per IRS rules. 

Implications for employers:

-        Medical bills from the out-of-pocket costs of childbirth cause major financial distress for many, and women on high deductible health plans are at special risk.

-        Employers can offer a choice of health plans that includes lower deductibles that should lead to less medical debt among those with newborns. HDHPs in general are unlikely to meet the financial needs of employees with modest incomes who incur substantial medical costs.

-        HSA seeds (employer funding of the HSA), especially those targeted at lower income workers, can help people expecting to prepare for the cost of childbirth.

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