Health & Racial Inequity: Birth Cost Recovery aka “The Birth Tax”
Introduction to the Inequity of the Birth Tax:
mom-and-baby
Birth cost recovery (the "Birth Tax") is a medical collections process directed by the State of Wisconsin and implemented by local county Child Support Agencies. It is NOT child support! Instead, the policy allows child support agencies to aggressively pursue the recovery of Medicaid-supported birthing costs from unmarried parents, often non-custodial fathers. Most states in the nation have abandoned this practice concluding that it is not in the best interest of babies, parents, and families.
The Situation in Wisconsin
Wisconsin* is the most aggressive of the few states that still pursue Birth Tax collections. Our ongoing research and investigation illustrates that the Birth Tax policy in Wisconsin systemically hinders statewide efforts to promote improved birth outcomes and reduce infant mortality. It drives families further into poverty and discourages unmarried fathers from playing an important, supportive role in their child’s life. Throughout the pandemic, and despite COVID related disruptions, many Wisconsin counties maintained aggressive collection actions.
*Dane Co., WI eliminated enforcement of the discretionary Birth Tax policy Jan 1, 2020.
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The Birth Tax is Not Child Support
The application process for BadgerCare Plus/Medicaid requires pregnant, unmarried women to identify the absent parent or face sanctions. This alone may deter women from getting immediate prenatal care and can have consequences like poor birth outcomes. Remember, married women enrolled in BadgerCare Plus/Medicaid have no such requirement.

Not cooperating means being sanctioned and terminated from Medicaid 60 days postpartum. Postpartum care for a new mother is crucial to prevent or catch serious, sometimes life-threatening, physical, and emotional conditions. It also impacts birth outcomes and infant mortality.

Maintaining access to health insurance means continued care, professional support, and services for both mother and baby. While the collection action is technically against the baby’s father, in many cases the burden is shifted to the mother, as she is forced to decide whether she will keep her Medicaid to receive postpartum healthcare, or refer her child’s father to the child support agency (CSA) for a Birth Tax collection action.

No money collected goes to support the direct care or protection of the child.

In fact, the Birth Tax may instead negatively impact child support cooperation and payment. Part of the recovery instead goes back to the CSA, a “county bounty,” used to support the operations of the CSA itself. The balance is returned to the state Medicaid program. In the grand scheme of things, the financial recovery is a relatively small amount of money for the state and CSAs, yet it creates life changing, insurmountable financial burden, and stress for many low income families.
Want to read more? More Birth Tax background information and research is available on our website!
The Birth Tax is a Racial Equity Issue
The Birth Tax disproportionally impacts black, indigenous, and Latinx families. Dane County, WI stopped collection actions as of January 1, 2020, citing the stark racial disparities in the Birth Tax. The data across the state shows the disparate impact of the policy. Consider:
  • In 2020, of the 58,871 deliveries in Wisconsin, 30,703 were covered by Medicaid.
  • 66% of those covered by Medicaid were to unmarried mothers
  • Several minority demographics face this dilemma at much higher rates: 85% of American Indian/Alaskan Native Mothers, and 88% of Black Mothers, as opposed to 58% of White Mothers.
The Impact of the Birth Tax
The Birth Tax policy itself is one more toxic stressor in a pregnant woman’s life. The paternalistic policy ignores the changing dynamic of a modern family, instead projecting a “marriage-first” platform to Medicaid enrollees. Even worse, Medicaid is used as leverage to force these new mothers to disclose private information.

We have seen families who are married in various culturally traditional ways, for example, some Hmong or North African clients, but these types of marriages are not recognized by the state. These families, who are often living together and intact, but technically “unmarried,” then have to deal with Birth Tax summons and court appearances.
Maria's Story:

When 5 months pregnant, "Maria" got a formal notice in the mail from her county child support agency (CSA) requiring she disclose the father of her baby, or be sanctioned and terminated from Medicaid. Not clear what this notice was talking about, she set it aside for another day. Only a week after welcoming their new baby into the world, a second notice arrived. This one said Maria missed her chance to claim a “good cause exemption” from the Birth Tax, and that the collection action would proceed. This family will have to appear at a child support hearing to protest the CSA’s inappropriate actions of trying to collect from an intact family (an Administrative Rule protects intact families from collections actions). Otherwise, they are at risk of receiving a judgement against the father for the Birth Tax if they comply with the CSA, or at risk of Maria losing her Medicaid if they don’t comply.
*Name changed to protect privacy.
About HealthWatch Wisconsin, Inc.
HealthWatch Wisconsin, Inc. is a non-profit subsidiary of ABC for Health. We promote information, advocacy, and systems change to reduce avoidable health disparities due to income, race, or poverty. Our goal is to help connect Wisconsinites to the health care coverage and services they need and deserve. Through our work with vulnerable populations, we have advocated for the elimination of the Birth Tax. The pandemic has exposed racial and social justice issues that include unequal access to health care, coverage, and services, including prenatal services impacting birth equity across races, ethnicities, and classes. We were active and successful in getting the Birth Tax policy eliminated in Dane County.
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