New Parents Can Face 'Catastrophic' Healthcare Costs

A study shows that pregnancy and delivery can cost some patients close to 20% of their annual income.

Pregnancy and childbirth can saddle families with "catastrophic" healthcare costs and their insurance status has a surprising link.

"This burden primarily affects those at lower incomes, especially if they have private insurance," corresponding author Jessica A. Peterson, MD, Maternal Fetal Medicine Fellow in Obstetrics, Gynecology, and Reproductive Science at the Icahn School of Medicine at Mount Sinai, said in a statement.

In fact, pregnancy and delivery can cost some low-income parents close to 20% of their annual income, found the retrospective, cross-sectional study from researchers at Mount Sinai and published in the journal Obstetrics & Gynecology.

Researchers used the Medical Expenditure Panel Survey from 2008 to 2016 to examine the prevalence, trends, and risk factors for catastrophic health expenditures in the year of delivery among birthing parents.

They identified more than 4,000 birthing parents of newborns and a 2:1 matched cohort of nearly 8,000 women who were of reproductive age but not pregnant. Researchers then looked for healthcare spending that was more than 10% of the family income during the year.  

Here's what they found in terms of prevalence, trends, and risk factors.

Prevalence:

• The study found that birthing parents were at a higher risk of medical spending that would create a financial burden than similarly situated people who were not pregnant
• Birthing parents also reported higher rates of unemployment and high rates of gaining and losing Medicaid in the delivery year
• Low-income birthing parents had the highest risk of catastrophic health expenditures or out-of-pocket payments for healthcare that exceeded 10% of family income in a given year
• These families spent as much as about 19% of household income on healthcare expenses or nearly 30% when health insurance premiums were included in spending

Trends:

• Implementation of the Affordable Care Act (ACA) did not significantly change the risk of catastrophic spending for parents
• Although it was associated with reductions in uninsurance (29–24%) and gains in Medicaid coverage (15–19%) for the matched control cohort relative to pre-ACA years, there was no significant changes among birthing parents

Risk factors:

• Public health insurance, including Medicaid, was associated with much lower risks of burdensome health costs than private insurance—particularly when health insurance premiums were included in spending—for birthing parents with low incomes

The study shows what reforms may be needed to the social safety net.

"Given the association between pregnancy, delivery, and catastrophic health expenditure—as well as the protective effects of public insurance—it is imperative that we create policies that not only ensure insurance coverage for pregnant people but also make it affordable," Peterson said. "Possible avenues to improve access to affordable health insurance include Medicaid expansion, as well as regulation of insurance cost-sharing and benefit designs."