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Published: Oct 30, 2017 6 min read
Photo illustration by Sarina Finkelstein for Money; Getty Images (2)

Childbirth is one of the most common ways that families interact with the medical system, as about 85% of American women have given birth by their mid-40s. And any stay in the hospital leaves patients vulnerable to sky-high bills in the U.S., the land of the the $600 band-aid and the $117,000 assistant surgeon.

Money asked FAIR Health, an independent non-profit organization, to pull numbers on the cost of giving birth in each state. Their prices represent an estimate of the amount that insurers agree to pay doctors and hospitals, known in the industry as the “negotiated” or “allowed” rate, for childbirth-related care. The numbers, from 2016 and 2017, are based on actual claims data and include the total episode of care, from the obstetrician’s fee (which generally includes prenatal care) to the hospital facility fee and the anesthesiologist’s fee. They exclude the price of caring for the newborn, which is typically billed separately and can add considerably to parents’ overall tab.

Prices are highest in Alaska, whose location makes it a bit of an outlier, says Fred Bentley, vice president at consulting firm Avalere. Most goods cost more in that state, since they have to be flown there. And services generally cost more, too: for example, to attract doctors to work in Alaska, local hospitals might need to pay higher salaries than facilities in the lower 48 states, and those costs get passed along to patients, Bentley says.

Regulatory differences among the states can also contribute to medical price variations, says Katy B. Kozhimannil, associate professor at the University of Minnesota School of Public Health, who focuses on maternity care. There’s also price variability within each state.

“There’s a fixed cost to being ready to deliver a baby at any time,” Kozhimannil says.

Rural hospitals serve fewer patients than urban ones and thus need to raise their prices to spread their fixed costs over their smaller patient population, she notes. Competition is also a factor: In areas where there's a dominant health care system, prices tend to be higher than in areas without a big player that wields such negotiating power with insurers, Bentley says.

But most births shouldn’t break the bank, experts say. While having a child is a momentous event for the parents, from a medical point of view it's usually very routine, says Carol Sakala, director of Childbirth Connection Programs at the National Partnership for Women & Families. “It’s mostly healthy moms and healthy babies, so these costs are pretty shocking from that point of view,” Sakala says.

Across the board, C-sections cost more than uncomplicated vaginal deliveries. That's because a C-section is major surgery, which involves the use of an operating room and the presence of more medical personnel, each of whom can bill for services. What's more, women who have C-sections usually stay in the hospital for longer than those with uncomplicated vaginal deliveries — typically 72 to 96 hours versus 24 to 48 -- and that increases the hospital's facility fee. Once American women have one C-section, they have a nearly 90% chance of delivering their next baby the same way, so the costs multiply for both mothers and the health system overall, Sakala says.

Your own costs are generally a percentage of your insurer's negotiated amount. Your outlay will depend on a number of factors, including whether your medical providers are inside or outside your health plan’s network, and whether or not you’ve hit your deductible for the year. Those who have no insurance at all are usually charged a higher amount than the negotiated rate.

If you encounter an out-of-network doctor, then your tab could potentially be much higher. Some plans cover out-of-network doctors at a lower rate than in-network doctors, while others have no standard out-of-network coverage at all. If your plan is one of the latter, and an out-of-network anesthesiologist comes in to give you an epidural, then you could be in for a shock. (Some states, such as New York, have passed laws to protect patients from this type of surprise medical bill.)

Health insurance plans usually set a ceiling on patient spending in a given year, which is meant to limit patient exposure to catastrophic expenses. For 2017 plans on the Obamacare marketplace, it's $7,150 for an individual plan and $14,300 for a family plan. But this out-of-pocket maximum, as it's called, applies only to covered services. And if standard out-of-network care isn't covered by your plan, then you're not protected by this cap if you receive such care.

Regardless of where you live, American women pay more to have a baby than residents of any other country. The highest prices in the U.S. were more than double those of the second-most-expensive country, Switzerland, according to a 2015 report from the International Federation of Health Plans that looked at the price that insurers paid for both vaginal delivery and caesarean sections; prices in 25th U.S. percentile were still higher than Switzerland’s.

Even if your insurance covers most of your tab, you should care about high medical prices. That’s because there’s no free lunch, in the hospital cafeteria or anywhere else: as insurers and employers pay ever-escalating prices, they eventually pass their costs down to you, in the form of higher premiums and deductibles.

Read more strategies for managing your medical expenses.