Birth rates fall during economic downturns — especially among lower-income women. A 2012 study found that birth rates declined 8% during the recession from 2007 to 2010. Presumably this was due to economic uncertainly, but could also be attributed to cost-sharing for a major medical event.
The out-of-pocket cost of having a baby is going up. High-deductible health plans (HDHPs) and their “Bronze” counterparts in Obamacare exchanges are expected to be the most common insurance arrangements for expectant mothers in the near future. A recent JAMA article discusses the implications of high-deductible health plans and rising out-of-pocket costs on expectant mothers.
Childbirth is the most frequent reason for hospitalization in the United States. Although Obamacare mandates that insurers cover birth hospitalizations, its only limit on cost-sharing is through relatively high annual out-of-pocket maximums. According to the article:
- Nearly four million women in the U.S. give birth annually.
- The average out-of-pocket cost for vaginal deliveries was $2,244 in 2010.
- Cost-sharing for women with HDHPs is twice as much as in traditional plans.
- Enrollment in HDHPs is likely to increase after the 2018 “Cadillac tax” on more favorable plans.
Should we be concerned about high-cost sharing for childbirth? Children are a blessing; not a medical affliction. Parenthood is a decision that most couples willingly make. This trend implies there is an opportunity for a movement towards responsible consumerism in childbirth.
Women are told to begin preparing for a pregnancy a year in advance. They should also begin planning on where to deliver a baby in advance as well. Childbirth is an example of how value shopping in health care can reduce prices since women and families generally have ample time to “shop around.” For instance, hospitals are the most expensive venue for any type of medical care — including for labor & delivery. But couples have other lower-cost options.
Indeed, health plans, employers and regulators should provide information on lower-cost options including birthing centers, nurse midwives and homebirths through comparison tools such as web-based price shopping platforms. In addition, many of the Bronze Health Savings Accounts plans don’t specifically inform enrollees that they qualify for an HSA, which would be instrumental in financing childbirth.
The rise of HDHPs greater incentivizes patients to behave like consumers and compare prices and look for lower-cost options. Policy makers and employers should empower families by providing transparent cost information and tools while encouraging medical savings.