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The Cost of Childbirth

6 min read

30 sec brief

Having a baby is one the most momentous occasions in your life.  It should be a happy time where you’re figuring out how to be a parent and feed, bathe and clothe this wonderful little creature that’s just come into your life.  Unfortunately, some parents are surprised by a hospital bill that’s much higher than…

Having a baby is one the most momentous occasions in your life.  It should be a happy time where you’re figuring out how to be a parent and feed, bathe and clothe this wonderful little creature that’s just come into your life.  Unfortunately, some parents are surprised by a hospital bill that’s much higher than they were anticipating.  Even if they have health insurance.

Why is this?  The cost of childbirth, like all other healthcare costs, depends on:

  • The type of health insurance you have (if you have health insurance).
  • Where you have your baby (costs vary depending on state regulations and regional care providers).
  • The type of birth you have (e.g. vaginal vs. cesarean).
  • Any complications related to your birth.
  • How long you stay in the hospital.
  • Whether your baby requires specialized care.
  • Whether the providers at the hospital are in your network.

Average Cost of a Hospital* Childbirth in the U.S.

*There isn’t good data collected on the cost of home births or childbirth in birthing centers, so this post will focus specifically on the cost of childbirth in a hospital. 

In 2013, a study by the advocacy group Childbirth Connection found the national average cost for an uncomplicated vaginal birth including newborn care was $32,093.  It was $51,125 for a standard cesarean (C-section) including newborn care.  Again, costs vary by state largely because of two factors:

  1. Regulations that vary from state to state, and
  2. The amount of competition healthcare providers face.

A chart published by Time.com illustrates this perfectly.  It shows a study completed in 2016 and 2017 that found the average cost of a vaginal childbirth in the U.S., not including the cost of newborn care, ranged from $5,017 in Alabama to $10,413 in Alaska.  The average cost of a C-section, ranged from $7,439 in Washington, D.C. to $14,528 in Alaska.

In each scenario, Alaska is the most expensive state in the country to give birth.  That’s because Alaska’s remote location makes the cost of most goods more expensive, and it’s largely rural, which means there’s not a lot of healthcare providers vying for patients.  When there’s one dominant healthcare provider in an area, insurance companies don’t have the same leverage to negotiate prices for services and that means those services usually cost more.

Why C-Sections are More Expensive than Vaginal Births

C-sections are major surgery.  You have to pay for a sterile operating room, anesthesia, a longer hospital stay and you’re more likely to have complications.  The more complications inherent in a type of birth, the higher the average cost of that type of birth.

Complications Make Everything More Expensive

A diabetic woman will pay on average 55% more to give birth than a woman who is otherwise healthy.  Healthcare for premature and low-birth weight babies costs almost 11 times more, on average, than care for an otherwise healthy baby.  Even a vaginal delivery with complications will cost an average of $6,900.  This is because complications mean more doctors, procedures, medication and longer hospital stays that all add to the total bill.

How Much will this Cost You?

It depends on your insurance.  If you don’t have health insurance, you will be responsible for everything.  If you do have health insurance, it will depend on your deductible, co-pays, maximum out-of-pocket amount and the time of year you have the baby.

For instance, if you have the baby in October and you’ve already met your deductible for the year, you will likely only have to pay any co-pays you’re responsible for, up until you reach your out-of-pocket maximum (of which the deductible is included).  If you have your baby in January, you’ll likely have to pay for your deductible, then any co-pays your responsible for, up to your out-of-pocket maximum.  But this only includes care provided by in-network healthcare professionals.

The “Surprise Billing”

Another thing that can increase the cost of childbirth dramatically, is care provided by out-of-network doctors and specialists.  Unless you’re giving birth in an HMO-owned hospital (and you have that HMO), you could potentially have your healthcare administered by providers not in your healthcare network.  These would include an ER doctor in the case of an emergency, an ambulance ride from a carrier not included in your health insurance network, anesthesia administered by an out-of-network anesthesiologist, or out-of-network neonatal specialists.

Even if you have really good insurance, you could end up paying for a large percentage of the care administered by out-of-network health providers and that could turn out to be hundreds of thousands of dollars.

If the cost of having a baby surprises you, you’re not alone.  Despite any of the above factors, the cost to have a baby in a hospital in the U.S. is more than it is in any other industrialized nation in the world.  The next closest country in terms of cost is Switzerland and their costs average less than half of what parents and insurers pay in the U.S.

So if you’re pregnant and have health insurance, make sure you know what your financial responsibilities are and talk to your doctor to make sure only in-network health providers will treat you and your baby.  If you don’t have health insurance, get some.  Federal law prohibits insurers from treating pregnancy as a pre-existing condition, so there should be some options available for you in your area.

Medical Expense Series

Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.

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