How to Pay for Childbirth
Birth is awesome. Babies are beautiful. Bills are not.
Getting stuck with a high healthcare bill is a total buzz kill after you’ve had a baby, which is meant to be a joyous time. When Jessica and I started having kids, money was very tight. She decided to quit working for a season so we relied on just my public teacher salary. I firmly believe money should never be a reason to not have kids, but it does help to plan ahead.
I’m going to summarize some of the financial considerations you need to plan for, but this is meant to be a quick read. It can get really complicated and I think you’ll soon understand why.
How much does it cost to have a baby?
The cost of childbirth can vary greatly depending on a variety of factors, such as the type of birth, the location, and whether or not you have insurance.
According to the Healthcare Cost Institute, the average cost of a vaginal birth in the United States in 2019 was around $9,700, while the average cost of a cesarean birth was around $15,800. Bear in mind, those are averages. More expensive births might cost triple the average of those types of births respectively. The costs can be significantly higher or lower depending on a plethora of complications that happen at the hospital and the technicalities of how and when your provider actually bills you. In fact, chances are you’ll have multiple providers billing you!
Why? Well, remember you are not just paying for “having a baby.” You’re paying for the costs associated with the pregnancy, delivery, postpartum, plus pediatric care as well. After the birth there’s a big shift: all of sudden there are two patients being cared for! (And I guess three if Dad faints during childbirth, bumps his head, and needs stitches. Don’t be that guy.)
The whole kit and kaboodle (pregnancy through recovery) averages about $19,000 in costs for those enrolled in large employer health plans. That’s according to the Peterson Center on Healthcare and KFF, a health policy nonprofit. Their 2022 study found that the average birth cost $2,850 out of pocket.
So if you have health insurance, it’s comforting to know you won’t be paying for the majority of the care.
Health Insurance and Childbirth
If you don’t know much about your health plan, it’s time to pick up the phone and ask them to explain what’s covered. Since the Affordable Care Act was passed, most health plans are required to cover maternal and newborn care. But remember, you will still be responsible for deductibles, co-pays, and any charges not covered by your plan.
If you are underinsured (or worse - you don’t have insurance), it’s time to shop around. I get it - you’re young, healthy, and never go to the doctor so you have the cheapest plan possible. If that’s you, know that things change dramatically after kids. You will likely take your kid to the doctor more times in a year than you ever took yourself as an adult.
How are you supposed to pick a plan for theoretical future costs? Well, I learned a lot by just talking to other parents at my work who had the same insurance. I would hunt people down who had different plans than mine so I could get the scoop on what costs looked like. It’s one thing to hear about your plan from the provider and another to hear what it’s actually like from customers.
This is also a good time to research Medicaid. If you're pregnant and have a low income, you may qualify for free or very low-cost health insurance.
If you have friends that have tried home births, they might have ranted and raved about how much cheaper they are than hospital births. This may be true for some, but it should never be considered a shoo-in. In fact, in some cases, it can be more expensive. This is because many insurance companies won’t cover them.
However, laws and policies are slowly changing in many states, resulting in some insurance companies providing reimbursements. It’s worth calling your insurance company just to be sure.
But generally, you should expect to pay anywhere from $2,000-$6,000 (or even more) for a home birth. Just like with hospitals or birthing centers, the total cost varies widely based on location and how many professionals are involved in the care.
Payment Plans. Taxes. Reimbursements. Crowdfunding.
Now for some chippier news…
Most hospitals and birthing centers offer payment plans to help make the cost of childbirth more manageable. Be sure to ask about this option if you're concerned about paying for the full cost upfront. Jessica and I used our Health Savings Account (HSA) to save up and make our payments with pre-tax money. Check with your insurance provider about HSAs. We love ours!
If you didn’t know, having kids reduces your tax burden. This can greatly help when you file your taxes. And if you start having multiple children - CHA-CHING, BABY! (pun intended) So talk to your tax professional about how childbirth is going to affect your outlook for next year’s taxes.
Another positive to note is that many insurances will reimburse you for associated costs like childbirth, breastfeeding, and newborn classes. In fact, many of our students get their costs of enrolling in Balanced Families courses reimbursed. Some hospitals and birthing centers offer these classes for free, but many do not. Plus, those free classes are generally not in-depth. So if you find a paid class you like, check with your insurance about reimbursements.
Lastly, with the rise of crowdfunding platforms, some parents-to-be are turning to online fundraising to help pay for their childbirth expenses. This is an intriguing idea, especially if you have special circumstances that deserve attention. I’m always amazed at the compassion I see from total strangers donating on crowdfunding sites.
For most people, the strategy for reducing costs is using their registry to ensure expensive items can be gifted. And heck, there’s nothing wrong with just asking for cash at your baby shower. There are always gifts you end up not using, making you wish you could return them for a refund.
Paying for childbirth can be overwhelming, but by understanding your options and planning ahead, you can minimize the financial stress of this special time. Remember to check with your insurance provider, research different birthing options, and consider payment plans or government assistance programs if necessary.