Report criticizes counties that continue to claw back Medicaid birth costs

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[MM Curator Summary]: The state thinks fathers that can pay should pay.


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(Kelly Sikkema | Unsplash)

Despite campaigns to end the practice, Wisconsin counties continue to take some unmarried parents to court to repay the cost of their children’s births covered by Medicaid, according to a new report published Wednesday.

The report, produced by ABC for Health, states that altogether Wisconsin counties have won legal judgments declaring that unmarried parents owed $106 million to repay the mother’s childbirth hospital bills that Medicaid had paid for. 

The judgments are part of a policy called birth cost recovery. The policy focuses on unmarried parents of newborn children whose mothers are enrolled in Medicaid while a child’s other parent has resources to pay some or all of those costs. 

The architects and supporters of the policy view it as another form of child support, ensuring that parents, typically fathers, take financial responsibility for their children regardless of their relationship with the mother. 

The authors of the new ABC for Health report dispute that premise, however. ABC for Health is a Madison nonprofit that helps low-income Wisconsin residents obtain health care coverage and works to combat medical debt. The organization has for years opposed birth cost recovery policiesdubbing the concept “the birth tax.”

Birth cost recovery claims are pursued when the parents of a child are unmarried and are assumed to be living apart. The policy sends a message that “if you’re married, we’re not going to be worried about it,” says Bobby Peterson, executive director for ABC for Health, who wrote the report along with Brynne McBride, the organization’s CEO. “If you aren’t married, we’re coming after you.”

To write the new report, “Merchants of Debt: Wisconsin Counties & The Birth Tax,” ABC for Health conducted an open records request of the state Department of Health Services for the total number of judgments on file demanding repayment from families with a child whose birth was covered by Medicaid. 

The data, which includes cases going back decades, showed 78,549 such judgments, totaling $106 million across the state. 

In 2020, when there were 58,872 births, 52% of them, or 30,703, were covered by Medicaid, according to the report. Two-thirds of the Medicaid births were to unmarried parents, making them potentially subject to birth cost recovery judgments. 

The report notes that among Black Medicaid patients giving birth, 88% were unmarried and therefore potentially likely to be the subject of a birth cost recovery judgment. Among American Indian and Alaskan Native births covered by Medicaid, 85% involved unmarried parents, while 58% of white Medicaid births involved unmarried parents.

County child support agencies pursue birth cost recovery suits and report the information to the state Department of Health Services (DHS). 

The report contends that outside Wisconsin, birth cost recovery has become less frequent. 

“Wisconsin is one of the few states that pursues this policy and is by far the most aggressive,” the report states. “Most states in the nation have abandoned this practice, concluding that it is not in the best interest of infants, parents, and families.”

While the money is collected by child support agencies, ABC for Health argues that the money should not be considered child support, “as none of the money collected supports the direct care or protection of the child.” 

Birth cost recovery “drives families further into poverty and discourages unmarried fathers from playing an important, supportive role in their child’s life.”

Peterson says ABC for Health has worked with clients who were inappropriately targeted for a clawback of Medicaid dollars in birth cost recovery because authorities wrongly perceived them as uninvolved in the child’s life when personal circumstances such as a job or other responsibilities kept them away from home for long periods.

He contrasted the state’s projected $6.5 billion surplus with “going after these families that have very little money.”

The report finds that Milwaukee County has collected $69.2 million in Medicaid birth cost recovery judgements and Dane County $6.8 million.

It singles out Dane County for particular criticism, noting that County Executive Joe Parisi declared in late 2019 that the county would not file new birth cost recovery cases. 

Peterson said that in conducting the study ABC for Health found that the county has continued to pursue cases that were already underway, however. During the COVID-19 pandemic, the county intercepted stimulus checks and supplemental unemployment pay as part of satisfying judgments awarded to the county.

In September 2020, after the Milwaukee County Board appeared to be on the verge of ending birth cost recovery, the board reversed direction. The county’s child support director, Jim Sullivan, argued at the time that birth cost recovery judgments were only pursued against absent fathers who had sufficient income and should be held financially responsible for their children.

Peterson says that argument has not persuaded him. The claim that fathers who were ordered by courts to pay back Medicaid costs for their children’s births had higher incomes has been “exaggerat[ed] way out of proportion,” he says.

“We have always said that at some point, if the child support agencies are applying prosecutorial discretion correctly, there may be cases that you pursue,” Peterson says. “But the vast majority of these cases are poor or working class folks that don’t have the resources to show up [in court].”