Why Out-of-Pocket Medical Costs Can Exceed $5,000 to Have a Baby

  • Researchers say 1 in 6 families are billed for more than $5,000 in medical costs after the birth of a child.
  • These expenses increase noticeably if an infant spends time in the neonatal intensive care unit.
  • Experts recommend that expectant parents review their insurance coverage before a child is born, as well as budget for unexpected expenses.

Having a baby may be a priceless memory, but the bill for childbirth hospitalizations can be an unwelcome and unexpected delivery for many families.

Out-of-pocket expenses for childbirth can exceed $10,000 even for new parents who have health insurance, a new study reports.

And while that might be a worst-case scenario, families with private health insurance paid an average of $3,000 for maternal and newborn hospitalizations, according to researchers from the University of Michigan.

“Our findings show that some privately insured families are shouldering an astoundingly high financial burden for childbirth-related hospitalizations,” said Dr. Kao-Ping Chua, a lead study author and a pediatrician and researcher at the University of Michigan Health C.S. Mott Children’s Hospital and the Susan B. Meister Child Health Evaluation and Research Center.

What increases costs

Chua and colleagues reviewed medical expense records on more than 12 million privately insured people in the United States from 2016 to 2019.

They reported that out-of-pocket childbirth-related expenses topped $5,000 for 1 in 6 families. When neonatal intensive care or was required, expenses topped $10,000 for 1 in 11 families.

About three-quarters of out-of-pocket expenses are related to delivery, while the remaining one-quarter are for newborn hospitalization, the researchers stated.

Not every infant requires time in the neonatal intensive care unit (NICU), Chua told Healthline, but it can be a big, unanticipated expense.

Chua said that families with high-deductible health insurance plans and those with plans that require percentage-based coinsurance payments are especially vulnerable to receiving big bills after their children are born.

Some annual deductibles are set in the thousands of dollars, while a 20 percent coinsurance requirement can result in out-of-pocket expenses totaling thousands more.

“Many privately insured families believe that if they have health insurance, they’re protected from the costs of childbirth hospitalizations. Unfortunately, this is simply not true for many families, particularly if their baby needs NICU care,” Chua said.

Costs for childbirth hospitalizations can vary widely, from about $7,000 in Arkansas to $17,000 in New York, according to Chua.

Families rarely know up front how much hospital care will cost, however, and many also are unaware of the extent — or lack thereof — of their health insurance coverage.

“In a lot of cases, these are young families who might not have ever been hospitalized before,” said Chua. “It’s the first time they’ve ever had to deal with the cost of hospitalization, so in that sense it’s unexpected.”

How to cut costs

Experts say there are few ways to limit the expense of hospital care related to childbirth.

Some families, for example, choose to give birth at home, sometimes with the aid of a midwife or doula.

Chua suggests that families educate themselves on the extent of their insurance coverage, shop around for more hospital care if possible, and budget in advance for the cost of delivery and neonatal care.

“Before delivery, clinicians can help privately insured families understand their childbirth benefits. If large bills are expected, clinicians should advise families to save money, assuming they have the means to do so,” he said.

“After delivery, clinicians should screen families for financial hardship, particularly those experiencing resource-intensive hospitalizations, such as NICU care, and connect them with local resources to address food, housing, and financial insecurity,” he added.

Dr. Michelle Moniz, a senior study author and an obstetrician-gynecologist at the University of Michigan Health Von Voigtlander Women’s Hospital, said policymakers can help alleviate the financial burden on families by waiving cost-sharing requirements for childbirth, which she said is a necessary, high value service.

“We should be looking at ways to improve childbirth coverage to avoid sending families home from the hospital with thousands of dollars in debt,” Moniz told Healthline.


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