Out-of-pocket spending for pregnancy care continues to grow in Massachusetts, report finds

DATE: March 31, 2022

Out-of-pocket costs for pregnancy care are rising in Massachusetts, placing a harsher burden on families, a new report shows. 

Premiums and cost-sharing is rising more quickly than wages and salaries, according to the Massachusetts Health Policy Commission, which is responsible for monitoring health care spending in the state. “Understanding the implications of this affordability challenge is especially important for pregnancy, birth, and postpartum care,” the agency wrote.

Labor and delivery is the most common hospital admission for Massachusetts residents under age 65, state data shows. As birthing costs continue to grow, the cost of caring for children in middle-income families is approximately $13,000 a year, not including any prenatal or birth care.   

“Starting or growing a family is an expensive life event, and it is important to understand how the cost of pregnancy, delivery and postpartum care may contribute to financial burdens for families,” the independent health care agency wrote. 

The report suggested that out-of-pocket spending for birthing episodes in Massachusetts is growing faster than the total cost of care. In other words, patients are bearing more and more of the costs for having children in the Bay State.

Between 2016 to 2018, the average spending on a full episode of pregnancy, delivery, and postpartum care increased by 4%, from $21,070 to $22,000, according to the commission. Meanwhile, the average out-of-pocket spending by patients for that same care increased by 23%, from $1,119 to $1,372. 

Out-of-pocket costs also grew for births alone, from 5.3% in 2016 to 6.3% in 2018.

Rising deductibles

Growth in out-of-pocket spending is driven by deductibles, HPC said.

“Deductible amounts and (high-deductible health plan) enrollment are rising; at the same time, many birthing people are relatively young and healthy, and would be unlikely to have met their deductibles with other health care utilization prior to giving birth. On average, deductible spending represented 65% of all (out-of-pocket) spending for pregnancy, delivery, and postpartum care as of 2018,” the report read.

The report also suggested that variations among out-of-pocket costs are mainly related to the different types of coverage offered by different-sized employers, rather than the care delivery itself.

In terms of delivery types, cesarean births cost more (at $26,433) than vaginal births (at $19,201). But patients of both delivery types have similar out-of-pocket spending.

From 2016-2018, out-of-pocket spending for vaginal deliveries went up by 23%, from $1,120 to $1,379, HPC reported, while cesarean deliveries grew by 21%, from $1,117 to $1,356.

Similarly, for hospitals, out-of-pocket spending growth was in the same range across cohorts, increasing by 21% at academic medical centers (from $1,147 to $1,383), 19% at teaching hospitals (from $1,069 to $1,274) and 25% at community hospitals (from $1,111 to $1,384).

'Insurmountable debt'

Reproductive Equity Now Executive Director Rebecca Hart Holder expressed concern over how increasing out-of-pocket costs for family care are taking a disproportionate toll on low-income families and communities of color.

“And we know the culprit: insurance design,” she said. “Too many people face steep deductibles when trying to access the full spectrum of pregnancy care. We must reimagine our health care system to center and support the needs of pregnant people, not insurance providers.”

Reproductive Equity Now, a grassroots organization focused on reproductive health equity, is working to pass an Act Ensuring Access to Full Spectrum Pregnancy Care, which would require health insurance plans to cover all pregnancy-related care —including abortion care, miscarriage management, prenatal care, childbirth, and postpartum care — with no cost-sharing. According to Reproductive Equity Now, the state Center for Health Information and Analysis (CHIA) review estimated it would cost a premium increase of $1.29 per member per month.

“Cost should never be a barrier to pregnant people and families getting the care they need, and childbirth should never lead to insurmountable debt,” Holder said.

The state reported similar concerns, stating in the report’s conclusions that out-of-pocket spending is more of a burden for low-income residents as well as people of color. 

By Cassie McGrath, Reporter, Boston Business Journal