The cost of having a baby isn't cheap — in the United States, at least.
The average cost to have a baby in the US, without complications during delivery, is $10,808 — which can increase to $30,000 when factoring in the care provided before and after pregnancy. The cost of having a baby increased by almost 50% in 7 years. It leaves many families with high medical bills, even when they’re insured.
New research has shown that the cost of giving birth in America for those with employer-sponsored health insurance has increased significantly due to “cost-sharing” and other factors, at an alarming rate. What they found was that those with employer-provided health insurance, the average patient spent around $4,500 out-of-pocket on labour and delivery in 2015 (the most recent year available), and in 2008, that same group of insured women (all enrolled in large employer-sponsored plans) paid just over $3,000.
Researchers also found that high costs of labour and delivery remain despite the changes put into effect with the Affordable Care Act, which required insurance provided by employers to cover maternity services. Even so, insurance companies “pass on certain costs” to patients via co-payments and deductibles. The typical deductible payment during this same period rose from just over $1,500 to nearly $2,500, while coinsurance rose about $300.
Childbirth cost varies by states and also dependent on the following:
Type of delivery
Vaginal delivery or cesarean section. It can cause an average difference of $1,900 to $2,600 in your hospital bill. Vaginal births, on average, cost $2,600 without complications, and C-sections cost $4,500, according to the Agency for Healthcare Research and Quality Healthcare Cost and Utilization Project. Vaginal deliveries account for about 7 in 10 childbirths, and C-sections for about 3 in 10, according to the Project. C-sections are the more costly of the two, and they're on the rise. The likelihood of a C-section in the US has increased by 500% since the early 1970s, reported Neel Shah for US News.
Mom's and Baby's Health
These are some common (and costly, but not-so-common) delivery complications include premature rupture of the amniotic sac, abnormal presentation, dangerous umbilical cord positioning, difficulty breathing, amniotic fluid embolisms, irregular blood pressure, postpartum haemorrhage
Any health condition can increase the chances of complications and delivery costs. For example, a delivery stay costs an average of 55 per cent more ($5,900) for a woman with diabetes, according to the Agency for Healthcare Research and Quality Healthcare Cost and Utilization Project.
Premature birth is one of the largest game-changers in terms of medical costs, occurring in about 1 of 8 pregnancies. Average healthcare for premature/low birth weight infants is nearly 11 times more costly than that for newborns without complications, according to a Thomson Reuters study for March of Dimes.
However, knowing the symptoms and avoiding particular risk factors can lower your chance of going into premature labour. If you do go into premature labour, your doctor may use medications to halt uterine contractions, according to Mayo Clinic-- but those meds are going to cost you. And if they cause additional maternal complications, they are going to cost you even more.
Health Insurance Coverage
Make sure your insurance covers childbirth costs, including baby's nursery care. Depending on your birth plan, you may also want birth setting and labour support options included in your provider's plan. Pay attention to your co-pay, deductible and what percentage is covered after your deductible is met.
If you decide to change health insurance plans, you may wish to do so before becoming pregnant. The federal government prohibits group health insurance plans from treating pregnancy as a pre-existing condition, but individual health insurance plans can legally treat pregnancy as a pre-existing condition, effectively denying you maternity coverage, according to the U.S. Department of Labor.
Some companies also require you to "pre-authorize" coverage for your baby, and some require that you call them when you arrive at the hospital to deliver-- if you forget, you could be refused coverage.
Paying for a new baby delivery is one budget-busting item, raising that baby is another. The USDA has also reported that parents can count on spending at least $12,000 in the baby’s first year alone.
When you bring home a new baby, you need a bundle of goods and services that directly accommodate that baby’s good health.
For example, parents can be expected to spend approximately $50 a week on baby food, diapers, and baby formula alone. Then there are “one-off” charges, like taking the baby to a pediatric physician for checkups and building a baby-safe bedroom complete with a quality crib, changing table, and clothing. Combined, that can easily run into thousands of dollars.
The very act of feeding a child can boost child care costs significantly, as well. Depending on the household income the USDA estimates that a 1-year-old child will cost up to $173 a month to feed; a 9-year-old costs up to $266, and an 18-year-old will eat his way through $304 every month.
It’s not an issue parents tend to focus on but the figures support the fact that food takes up 18% of all child care financial costs.
Child Care and Education
According to federal government estimates, U.S. parents shouldn’t pay more than 10% of their annual household income on child care. The fact is, many parents spend well over 20% of their income on daycare and pre-school education.
The average cost of daycare varies depending on which state a family resides, but a recent study from Care.com shows that the average weekly cost for a single child at a family care centre is $199, $211 for a traditional daycare centre, and a massive $596 for a full-time nanny.
Signing a child up for soccer or gymnastics doesn’t cost nearly as much as daycare or pre-school fees, but doing so will ding the household bank account. On a per-season basis, parents are expected to spend between $500 and $1,000 annually on organized sports, according to the Aspen Institute.
Add to the mix several hundred dollars on arts and crafts, dance, YMCA, and other family activity costs regularly, and just keeping junior active can add several thousand dollars a year to the family budget.
Cost of Lost Parental Income
Often, two working parents will have a baby and one of them will opt to leave the workforce, for the short- or long-haul, to care for their child or children. Most often this is the mother, and studies show that choosing the life of a stay-at-home mom over remaining in the workforce, as spiritually fulfilling as that can be, leads to a serious decline in overall household income.
Forbes magazine points to a “salary penalty” of 30% for being out of the workforce for two or three years. Plus, salary alone doesn’t tell the entire “financial loss” story of being a stay-at-home caregiver. Loss of retirement and Social Security income, and lost years of wage growth factors into the child-raising financial equation, too.
A 2016 study from The Center for American Progress shows that a woman earning about $30,000 annually on the job and who left the workforce at age 26 to care for a newborn child, and returned to work at age 31, would lose an estimated $467,000 throughout her career. That’s almost a 20% decline in over career wages, the study notes.
In view the high cost of having kids, there are tax breaks that qualifying parents should try to claim and take full advantage of them, such as
· Child Tax Credit
· Credit for other dependents
· Child and Dependent Care Credit
· Earned Income Tax Credit (EITC)