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The True Cost of Having a Baby in 2016

If you are currently expecting a child, or you’re thinking about having your first baby, you’re probably feeling a little overwhelmed by all of the information being given to you. From birthing pools to breathing techniques, baby clothes, pain relief and disability screening; there’s an awful lot to think about when you’re preparing to give birth.

We’re used to thinking of pregnancy as nothing more than a waiting game, but it’s actually one of the busiest times of life for a woman. There are endless exams, scans and appointments to attend, and with all of these responsibilities, there comes another concern—the cost. Having a baby anywhere in the world isn’t easy, but in America, the cost of starting a family has soared to epic proportions.

To give you some perspective on just how much more expensive it is to have a baby in the US than it is the rest of the world, here is an interesting statistic about Kate Middleton and her first birth. It cost the British royals around $15,000 to have their first son, Prince George, in one of the most expensive maternity wards in the country. In the US, the average cost of a regular birth is around $30,000.

The difference is simply staggering, so what is it that makes pregnancy and birth so expensive in this country? This in-depth guide will give you all the information that you need about the costs associated with starting a family.

Getting a Suitable Insurance Policy

Clearly, there aren’t many regular couples who can afford to pay $30,000 out of their own pockets to have a baby. So, almost all children in America are born with the help of robust health insurance policies. If you are pregnant or planning to get pregnant, it is imperative that you find a suitable insurance policy as early as possible. The following health-related terms will crop up again and again, so make sure that you understand them.

Premium: This is the amount of money that you’ll pay for an insurance policy. This is usually paid in monthly installments that run anywhere from $100 to $285.

Out-of-Pocket Costs: This is where things get pricey, because U.S. health insurance generally works on a co-pay basis. This means that the pregnant woman or couple must pay a percentage of the fees incurred by standard checkups, scans and appointments. They must also pay a percentage of the fees if the expectant mother has to have anything but a bare-bones birth. For example, C-sections are almost always co-paid. A C-section costs around $50,000.

Deductible: This is the amount that you have to pay before your insurance coverage kicks in and starts helping with the costs of pregnancy and birth. Up until this point, you will be expected to pay all fees yourself, on top of the insurance premium. Once this sum has been reached, the coverage will be activated and you’ll get some financial help. If you reach the maximum out-of-pocket percentage stipulated by your agreement, the insurer will cover all further costs. A normal deductible is $1,000 to $3,000.

Out-of-Pocket Max: Fortunately, there is an upper limit on the amount that you can be expected to co-pay. As pregnancy is such an expensive process for women in the U.S., the best way to tackle the costs is to search for an insurance deal that offers a low out-of-pocket threshold.

Introducing the Main Insurance Providers

In the U.S., there are only a handful of key health insurance options. To get the best deal, you need to pick one that suits your needs.

Medicaid

If you are pregnant, but you’re pretty sure that you qualify for extra support (your combined household income is lower than average), you may be eligible for Medicaid coverage. This is a special option, because unlike standard insurers, it passes only a tiny amount of the co-pay expenses to the mother or couple.

In recent years, a number of studies have focused on the benefits of Medicaid for pregnant women. On average, this kind of coverage accounts for 99 percent of all the expenses associated with pregnancy and birth. However, it is only available to women who are on a low income (around $16,000 per year). If you think that you might qualify, apply for this support.

Standard Insurance

The benefit of standard insurance is that it usually has a clear open and end date. So, if you know that you’d like to get pregnant, you can apply for coverage at just the right time. There are five types of standard insurance coverage; catastrophic, bronze, silver, gold and platinum. The latter is the most expensive, in regards to monthly premiums, but it has the added benefit of fewer out-of-pocket co-pay expenses.

Crucially, with standard plans, there are co-pay expenses—no matter which type you choose. The question is only how many and how much. According to marketplace reviews, silver plans are the best choice, financially, for families who don’t qualify for Medicaid but who are still likely to need a lot of help with the cost of having a baby. With a silver plan, around 70 percent of the total costs are covered; 30 percent is paid out of pocket.

The average yearly cost for a silver plan is around $5,000. The average deductible is a yearly $4,000. The out-of-pocket expenses for a reasonably healthy woman, who has a regular birth, are around $2,700. So, add the deductible and the out-of-pocket expenses together and you get a sum of $6,700. This is the approximate cost of giving birth, with a silver insurance plan; this is the sum that would not be covered by the insurer.

Giving Birth Without Health Insurance

To reiterate, unless you have a bank account that would make Donald Trump blush, it’s a very bad idea to give birth without health insurance. The average cost of a standard birth, without insurance, is around $30,000. This figure rises sharply for anything but the most basic of vaginal deliveries.

If you are in a situation where it looks like you may have to give birth while uninsured, get in touch with the hospital where you plan to deliver as soon as possible. You may be able to discuss payment options and plans with them directly, so that you’re not slapped with one huge insurmountable bill as soon as you get home with the new baby.

Giving Birth with the Help of IVF Treatments

For women who cannot get pregnant without clinical intervention, things are even more expensive. And, the bad news is that many insurers simply don’t cover this kind of treatment at all. While it’s certainly not impossible to find a policy that will help, a lot of couples have to go it alone. If IVF treatment ends in success, the costs might seem small in comparison, but IVF comes with no guarantees.

The average cost for one cycle of in vitro fertilization is around $12,000. Some clinics offer cycles for the slightly lower price of $10,000, but it is rare to see prices any lower than this. It’s important to remember that, as with regular pregnancy, there are lots of additional expenses too. So, the average couple spends an estimated $19,000 per initial IVF cycle.

The majority of clinics do offer additional cycles at a reduced price of around $7,000. Even so, this means that three cycles of IVF comes to approximately $33,000 for regular couples, on a regular income. The final cost will, of course, depend on a number of different variables. These numbers are designed to serve as a guide.

The Average Cost of Surrogacy

In the US, surrogacy is surprisingly common, though it is generally an option that is only open to the very wealthy. This is because the average cost of caring for a surrogate mother (and funding her pregnancy and birth) can run anywhere between $60,000 to a whopping $120,000.

The actual cost largely depends on how comprehensive and watertight the arrangement is. If a lawyer and a professional surrogacy agency are hired, the expenses climb quickly. It is also impossible to tell whether additional custody fees will be needed after the birth. Sometimes, surrogates change their minds or they want to alter the terms of the agreement.

Still thinking about having a baby? We truly hope you are. While some of these numbers my scare you, it's better to know everything you can before diving in. As long as you do your homework and are aware of not only the finances but also everything else (which is a lot and can't possibly be covered here!), you should have a great time having and raising your child.

Nathaniel Berman is Editor in Chief of Shebudgets, a women's personal finance and lifestyle website. He is a husband and father of 2 boys, one the age of 3 and the other a newborn. He's got firsthand experience of all this, including just in the last month!