How the GOP Can Make Childbirth Affordable Without Breaking the Bank

In the wake of the Dobbs ruling that overturned Roe v. Wade, Republicans have faced the perennial criticism that the party was merely “pro-birth,” not pro-life.  Abortion advocates pointed out that economic concerns—the fear of lacking the financial means to raise a child or feeling like a child would keep a family in poverty—are among the top reasons women cite for seeking abortions. If you want all these babies to be born, the thinking goes, what are you going to do to help their mothers?

The pro-life movement can rightly point to a long list of social services it provides for expectant moms, but the wake of the Dobbs decision has reiterated the need for a bolder political approach. A truly pro-life, pro-family GOP should better address the financial strains facing new parents and improve health outcomes for mothers and babies, and some lawmakers have offered proposals that deserve widespread support. 

Since Dobbs, one idea that has been proposed by the left and the right is to “make birth free.” But a better way to address the financial risk for parents is by expanding Medicaid eligibility for pregnant mothers and making health insurance coverage for maternity care more user-friendly and less expensive.

It is certainly true that working- and middle-class families can find themselves under financial pressure when welcoming a new addition. A recent Kaiser Family Foundation analysis found new parents pay an average of $2,854 in out-of-pocket costs associated with pregnancy and childbirth, and a 2020 Health Affairs paper found that out-of-pocket expenses for maternity care rose 48 percent from 2008 to 2015. That increase was driven largely by increasing deductibles, not an increase in the actual cost of care, meaning that patients were increasingly responsible for shouldering the cost of having a child. 

Fiscal conservatives of a certain stripe have tended to oppose Medicaid spending for fear of encouraging red ink or dependency. But policymakers who call themselves pro-life cannot afford to shrug their shoulders at these developments. Two policy approaches could make parenthood a little more affordable. 

First, states should expand eligibility for Medicaid coverage for pregnant women, leaving aside the more controversial question of expanding coverage to the broader low-income population. Under current law, states are required to deem pregnant women making 138 percent of the federal poverty level (FPL) eligible for all care related to pregnancy, delivery, and up to 60 days postpartum. (And 34 states have taken steps to lengthen postpartum coverage for up to a year.) Some states have expanded eligibility beyond that—in Iowa, Wisconsin, and the District of Columbia, pregnant moms with incomes three times the FPL can qualify to have their birth covered by Medicaid. 

Congress could allocate money that would allow states to give pregnant women whose household income is up to 200 percent of FPL the option of having Medicaid cover their pre-, peri-, and postnatal care. To put this in context, that would mean any family of four making less than $60,000 this year, or a couple making less than $39,400, would have the option of having their birth paid for by Medicaid. No co-pays, co-insurance, or deductibles. 

Some parents might prefer to stick with their own insurance plan, but having the option of public coverage could ease financial pressures on working-class families. And it is worth noting that states with the highest levels of uninsured women of childbearing age tend to be the ones moving quickest to restrict abortion. 

Expanding Medicaid eligibility would ensure fewer new parents would return home from the hospital to a slew of unexpected envelopes for various services related to their new addition. It could also help new parents access prenatal services faster. And because this would be limited to pregnant women and their babies for up to a year postpartum, it wouldn’t be as costly or raise the same concerns about dependency as would expanding Medicaid for all low-income adults, or setting up a single-payer Medicaid program for all births. 

For families with incomes above the new threshold, which would include everyone making above the median household income, Congress could tweak the rules regarding health coverage of pregnancy-related care. 

A straightforward approach would require ACA-compliant health plans to treat labor and delivery costs more generously. As an actuarial matter, it would be relatively straightforward to simply cap parents’ out-of-pocket costs at a reasonable amount, say $2,000 or $3,000. This would give parents peace of mind knowing they’d be less likely to be surprised by a five-figure bill. Having the government serve as the insurer of last resort for exceptionally high-cost deliveries, such as babies with lengthy NICU stays, could reduce the risk for insurers. 

It wouldn’t be a perfect fix; the roughly 1 in 8 Americans whose health insurance coverage is not covered by the ACA’s rules would be out of luck. But, as the Niskanen Center’s Robert Orr has written, creative policymakers might tackle that problem through retroactive reimbursement or incentivizing partially self-insured plans to re-insure against pregnancy-related expenses. 

And more work needs to be done to make health care more administratively user-friendly, especially in the postpartum realm. When a technician comes in for an infant hearing screen six hours after delivery, most parents wouldn’t think to check to see if they are in or out of network. Yet 10 percent of childbirth and newborn care results in a claim from an out-of-network provider. Congress’ attempt to curb surprise billing—which took effect earlier this year—was a welcome step, though some loopholes remain, especially for non-emergency care. 

Such expansions might bring potential downsides that would need to be avoided. Medicaid reimbursement rates often fail to cover the true cost of care, so the Centers for Medicare and Medicaid Services would need to ensure rates aren’t set too low for OBGYNs to continue delivering babies. Bundled payments, which pay providers a single, fixed fee for costs associated with low-risk pregnancies, could reduce the risk of inadvertently encouraging doctors to opt for higher-cost interventions like early induction or unnecessary cesarean deliveries.  

Another policy change that more states should pursue is allowing licensed professional midwives, rather than certified nurses, to attend at-home births. Many mothers want to labor and deliver outside of a clinical setting, and increasing the number of potential health providers for low-risk births can give moms more options and reduce costs. States could also make it easier for moms to deliver at home or in a birthing facility, which can be both cheaper and more comfortable, by increasing their reimbursement rates for out-of-hospital births. 

A plan to make pre-, peri-, and post-natal health care treated more generously by public welfare programs and private insurance providers would, in a sense, be socializing the costs of reproduction. But conservatives should not be alarmed that these ideas would be the first baby steps toward single-payer health care. 

Pregnancy, unlike most any other major health care expenditures, is ill-suited to be treated as an insurable event. Many parents know when they will be getting pregnant or delivering a baby and can opt in or out of a health care plan based on that knowledge. This dynamic, known as adverse selection, helps make the health insurance market more dysfunctional, and increasing public coverage can help address some of that concern. Additionally, if perinatal care were like any other economic good, we might worry about moral hazard—that making childbirth cheaper or free could lead to overconsumption. But in an era of record-low birthrates, even the most doctrinaire conservatives might reconsider their opposition. 

The pro-life case for making birth completely free, on the other hand, isn’t as straight-forward as some proponents would argue. Recent research indicates that Medicaid expansion under the Affordable Care Act showed no sign of reducing maternal mortality. And many low-income parents already pay nothing for childbirth. In 2020, 42 percent of all births were covered by Medicaid, including more than half of the births in Louisiana, Mississippi, New Mexico, Oklahoma, Alabama, and Texas.  

But more generous subsidies coupled with changes to insurance regulation are exactly the tack Congress has taken when it comes to health care in recent years. In contrast to more sweeping visions, a targeted expansion of Medicaid for pregnant moms and more meaningful caps on out-of-pocket payments has the potential to be politically doable in the short term. 
Childbirth can be a difficult and dangerous process, and its costs can go far beyond parents’ pocketbooks. But the financial costs are, in some ways, the easiest ones for policymakers to address. And those who consider themselves pro-life and pro-family should be unafraid to take the side of parents who just found out their precious bundle of joy and 2 a.m. feedings was the cause of a four- or five-figure hospital bill.