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Average Payments for Childbirth Among the Commercially Insured and Fee-for-Service Medicaid


It is well-established that the rates hospitals and physicians are paid to provide health care services are significantly lower in Medicaid than in private health insurance. In this brief, we provide new data on this payment gap in the context of childbirth, an especially relevant area of care since Medicaid and ESI together cover the vast majority of births in the United States. We used HCCI's unique commercial claims dataset and data from the Transformed Medicaid Statistical Information System (T-MSIS) from the Centers for Medicare and Medicaid Services to compare the average payment for childbirth among birthing people with fee-for-service (FFS) Medicaid coverage and those with employer-sponsored health insurance coverage (ESI).

We present data on childbirth payment in ESI and FFS Medicaid in 38 states for which we have reliable payment data for both types of payers (please see Methodology for details). Our data show that the average ESI payment for childbirth was greater than the average FFS Medicaid payment for childbirth in all 38 states, with an average difference of $8,732 for all deliveries, $11,084 for c-section deliveries, and $7,461 for vaginal births. The figure below shows that the difference between average payment per birth in ESI and FFS Medicaid ranged from almost $2,000 in New York to over $15,00 in California. Differences were similar for c-sections and vaginal births (see Downloadable Data).

There is considerable evidence that lower payment rates in FFS Medicaid have implications for access to care, including a higher probability of being turned away by physicians, and that birthing people with Medicaid coverage have meaningfully different experiences than birthing people with commercial insurance in terms of health care use and choice of care. The data we present here are a call for a more in-depth understanding of the links between Medicaid and ESI reimbursement, access to health care among birthing people, and outcomes that can be used to inform policy going forward.

In this brief, we examined spending only on the birth itself. We did not include spending on prenatal, postpartum, or newborn care. Payments for childbirth among people with ESI include amounts paid by both the insurer and the patient; we do not include out-of-pocket costs for FFS Medicaid since direct payments for covered services are largely nonexistent. Because Medicaid payments are based on FFS Medicaid only, payment information may not be equally representative across states depending on the percent of Medicaid enrollment in managed care in that state. Our commercial claims are a convenience sample from more than 30 insurers and also vary in how representative they are across states. 

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