The cost of raising a child in America has soared (2018)

https://www.marketwatch.com/story/these-5-charts-show-how-expensive-it-is-to-raise-children-today-2018-03-29

by jelliclesfarm • 7 years ago

88 96 7 years ago

I'm having identical twins, classified as high risk. The cost is mind-boggling. I've already paid $7000+ out of pocket, and they have not even been born yet. Costs are mostly related to having to do ultrasounds all the time, and one MRI.

why-el• 7 years ago

I am really sorry to hear this. :/ You are bringing two wonderful human beings to the world and the system is failing you badly.

lawnchair_larry• 7 years ago

What insurance plan can result in $7k out of pocket for unborn children?

irrational• 7 years ago

A very poor one it sounds like. Even a high deductible plan shouldn't have an out of pocket expense that is that high.

guntars• 7 years ago

Any high deductible plan will do that, but he’s covered after that. It’d also be conducive to his wallet if they get born before Jan 1st.

pkaye3• 7 years ago

High deductible plans for one.

asark2• 7 years ago

Aside from the high deductible plans mentioned, even a fairly modest one can reach that if you split the pregnancy over two years :-(

Yes, folks outside the US, we here in America try to time pregnancies over bullshit details of how our insurance plans work. At least anyone who's thought about it does. Those who haven't get a nasty surprise, and pay (up to) double.

TuringNYC3• 7 years ago

I can only speak about NYC but this was a common cost range even with diamond plans from corporations. A lot of it can be fine print and delta balance billing.

BeetleB• 7 years ago

Many high deductible ones, where you are covering multiple people (e.g. a spouse and a kid).

And almost everyone where some medical professional, somewhere in the chain of hospital visits, happened to be out of network - someone you had no idea would be involved. Examples would be where the doctor sent lab results to another doctor for analysis, etc.

slavapestov• 7 years ago

We have a United Healthcare PPO through Apple, it's considered a "good" plan. We paid about $6k out of pocket for a pretty standard hospital birth.

lanrh1836• 7 years ago

If you knew you would be having a baby one year, wouldn’t it make sense to pay a higher premium for a better plan with a low or 0 deductible? Or does the math still not work out?

gavanwoolery4• 7 years ago

I did switch to the best available plan at the soonest date I could, but that was halfway into the pregnancy

TuringNYC3• 7 years ago

1. Not all companies give you such options 2. A lot of the cost is in fine print of things not covered, e.g. during our delivery two of the many many medical personnel were out of network and we ended up paying a huge co-pay for that — but it wasn’t like we could have checked ids for each doctor entering the room etc for insurance acceptance. They entered, they did something, they billed.

EADGBE6• 7 years ago

Becoming pregnant isn't a qualifying life event, but having a baby is. So if you time it right with open enrollment, you certainly could switch to low deductible if such an option existed for your insurance plan.

The insurance options (4 different providers over the years, 3 BIG players in the game, one self-funded) I've had so far in my fatherhood haven't offered a stepped plan, either (they were all or nothing).

souprock5• 7 years ago

You didn't say why, which is fine, but I hope there is something more significant than just "twins" and that there is an actual intent to change treatment based on all that testing. If you wouldn't take specific action based on the results, then the exposure is unjustified. Satisfying curiosity is not a proper justification.

See the Chinese ultrasound study. It's a study that is impossible to perform in the USA because it wouldn't pass ethical review. Ultrasounds were proven to cause structural changes in the brain. One can reasonably assume that structural changes are bad.

analog31• 7 years ago

Certain pregnancies are automatically elevated to "at risk" status, and AFAIK twins are one of the check boxes. Another is maternal age.

gavanwoolery4• 7 years ago

From the onset, they were classified as high risk due to being mo/di twins (monochorionic/diamniotic). It is now known that these pregnancies are much higher risk due to entanglement and other issues ("high risk" being a relative term). As it turns out, the doctors were right to assume this risk, as one of the twins has already received brain damage from (what they hypothesize) was inadequate blood flow.

I'm generally against anything but procedures that are absolutely necessary, and the ultrasounds and MRI certainly were not voluntary on our part. Personally, from all the research I have gathered it seems like ultrasounds are quite safe, although I am not an expert.

As for taking action, I had the same dilemma. Before we knew anything was wrong, one of the doctors ordered an MRI based on a hunch. I did not want to do the MRI unless it gave us some sort of information we could act on, and abortion was out of the question, legally and morally speaking under these circumstances. But we did it anyway, and at least the information has prepared us for what to expect.

DoubleCribble• 7 years ago

If your hospital is like many/most of all US hospitals despite only one hospital room, only one set of nurses and doctors, only one mother... you get to pay the full price of delivery charges for each baby!

They should be required to hang a sign outside L&D, "Half a womb still pays for the full room." just so you don't have a(nother) heart attack when the bill arrives in the mail.

gavanwoolery4• 7 years ago

Oh I'm aware of this. They even charge double for each ultrasound!

pfranz• 7 years ago

Sadly, it's infeasible to predict costs in the US. When my wife was pregnant I pulled up our insurance's "example pregnancy out of pocket cost* (*not expected to reflect actual costs)" PDF. It showed something like $650 out of pocket for all prenatal and delivery costs. The actual cost ended up being closer to your's.

I called my insurance to ask what I could expect to pay assuming a normal pregnancy after being amazed at the cost already billed. They suggested I a) call my doctor's office and get each billing code for each procedure expected b) call their billing office to get each cost for each c) call my insurance with these numbers and get out of pocket expected costs. I just can't imagine trying to compare costs between multiple hospitals or OBs.

I tracked medical costs fairly closely and noticed things like a quick procedure would get 2 separate coded procedures. Someone I know familiar with medical records said that kind of thing was commonplace. So for a laymen, it seems ridiculous to anticipate costs even for routine things.

q845712• 7 years ago

The article points to housing as one of the largest factors of raising a child, and mentions healthcare as well.

To my very limited understanding, we calculate inflation from some fixed [per comments below: not entirely fixed] index of consumer goods prices [per comments below: which include some notional aggregate of rent].

Is it possible that instead of saying "The cost of children, housing, healthcare, and education have risen sharply" we should instead be saying "Inflation has increased substantially more than previously calculated because the price of a loaf of bread has been fixed by subsidies"?

JumpCrisscross3• 7 years ago

we calculate inflation from some fixed index of consumer goods prices

CPI includes housing, healthcare and tuition. The basket isn’t fixed, e.g. 1999 CPI didn’t include cell phone data costs.

djdidf3• 7 years ago

It includes rental, not purchasing homes

opencl• 7 years ago

The weighting applied to housing, healthcare, and tuition appears to be nonsensically low compared to the fraction of income most people spend on them.

Though to be fair CPI is computed nationally and things like housing prices are so localized that it's impossible to come up with a number that makes sense across the whole country anyway.

TuringNYC3• 7 years ago

Depending on where you live, the best public schools can often be accessed only by address, and are quite often limited to homes (not apartments). So yes, depending on where you live, housing costs are a big part of child raising costs.

namirez• 7 years ago

and are quite often limited to homes (not apartments)

Interesting! I had never heard about this. Do you have a source for it?

esotericn2• 7 years ago

Agree.

Inflation statistics in the UK are almost entirely useless for the same reason.

You cannot use CPI to determine a "real rate of return" because anything you'd actually want to buy is not included.

The basket makes up something daft like 10-20% of my expenditure because, yeah, groceries and electronics and stuff are cheap.

It's a metric that only really has relevance to retirees with homes paid off on a fixed income. Everyone else spends ~40%+ on housing.

roenxi• 7 years ago

There is also a philosophical question of whether the method used makes sense at all. My understanding at the moment is the CPI is being held down by collapsing costs of electronic goods - is that important for a luxury good?

I have ongoing questions about how the weighting process works in general, I don't understand it; it is too complex for me. If they reweight the basket every couple of years to reflect purchases, can the index practically rise that much faster than wage growth? Goods for which there is real competition might disappear from the basket of goods. If they don't reweight, is the index relevant at all?

In terms of real returns, if I have to do something with my personal finances I adjust by the M3 monetary aggregate index (M2 for the Americans) or one of its siblings rather than published inflation numbers. Not only is it simpler it also seems like a more useful metric.

rtio• 7 years ago

I am not sure it is really inflation though, since it seems to be more a factor of wealth inequality. If you have a million, or even a couple of hundred thousand, dollars life might not be that expensive month to month.

mistrial9• 7 years ago

Medical guilds, unions and financial players are mature, strong and in-place. Many if not most, are well paid across the spectrum, and therefore can afford their own services. Why bring prices down ?

ps- if you think this is an endorsement of the situation, think again; simply a cold-blooded game theory thought on a most emotional topic

tenebrisalietum• 7 years ago

Your guilds will get disrupted with a OBGYNer or BirthBnB at some point.

souprock5• 7 years ago

Most of this is totally optional. I have a dozen kids, and I'm sure not spending that kind of money per kid.

Births are usually cheap. You can go it alone for $0 or get a midwife for $2000 to $6000. Most of us have health insurance with an out-of-pocket maximum. For example, mine tops out around $11,000. Crazy bills can usually be negotiated, with the hospital very aware that you might just not pay at all.

Child care is sort of free (though an opportunity cost) when done by family. That choice also strengthens the family relationships. It scales well, with older kids assigned to help younger kids.

Housing isn't bad unless you insist on a bedroom for each kid. You need a house for yourself anyway, and most houses have 3 bedrooms. Homeschool to avoid the school district bidding wars.

Food... is a bit of an issue. I go through about $4000 per month, but I'm not living on beans and rice. Being more frugal, $100 per kid per month should be possible for a large family.

Transportation can be mostly avoided.

Clothes become cheap due to hand-me-down policy.

Sports can be cheap. You don't have to sign up for hockey. Play stick ball.

jelliclesfarm3• 7 years ago

Are you home schooling? In CA, depending on where you live, it costs the state and tax payers 10-14k/annum per child. That’s for 12 years.

Dozen kids would cost about 1.6 million for 12 years of public education.

ETA: I just saw that you mentioned homeschooling.

If it’s ok to ask, how much are your expenses per month and do you own your home?

souprock5• 7 years ago

I get dual-enrollment for free here in Florida, which most of my kids use to get AA degrees, so the state/county is paying something. I spent about $1000 for AP Chemistry labs and possibly about that much on all kinds of textbooks.

Expenses are primarily food, at about $4000 per month. The rest isn't usually notable unless something is broken, such as when our 4-ton air conditioner is low on coolant or gets the fan stuck. Normally somebody needs surgery (cracked skull, rib cage correction, etc.) so my medical bills hit the yearly out-of-pocket maximum at around $11,000. We probably do 100 to 200 miles per week, fuel being $2.25, so that is pretty much nothing.

I paid off my home in 8 years. It's 3500 square feet on 0.39 acre, about 0.9 mile from the beach. I got it for about $310,000 after the crash.

tathougies2• 7 years ago

My catholic elementary school was only 4k per child in orange county and my high school 10k. For elementary, all kids past three were free and this being catholic school there were several large families. And my brother and I are both successful... Married with kids. My brother retired early actually and owns multiple homes and we'll be buying our first this year. Just a data point that california is overcharging the state for the quality of education provided. My mother was a public school teacher and the money is mostly wasted.

anonymoushn• 7 years ago

I don't need a house for myself. I live in a small closet with my partner for $2500/mo. Houses start at $2 million.

foxfired3• 7 years ago

In January of this year, I was blessed with two beautiful fraternal twins. Twins come out earlier and are expected to be preemies usually. The problem was, they were due on March 15.

We spent two months in the NICU (newborn intensive care unit). The nurses couldn't be more amazing. They took care of those babies like they were their own. And along the way, they took care of us. They made sure nothing was ever missing.

My sons got new pacifiers every time one got dirty. If their covers ever so slightly touch the floor it was thrown into the laundry basket. Their feeding tubes were constantly changed. I was grateful.

My sons were born barely weighing 2 pounds, but they came out of the hospital as plump babies. Then the bill came.

We have insurance. In fact, a very good insurance. The bill for the first born came a couple weeks later and it was in the amount of 1.25 million dollars. (I fainted) We called the insurance. They told us to wait, that the insurance will kick in.

It kicked in and the bill came back rectified with the amount of 250k. The adjusted bill for the second child came shortly after.

To give you an idea what is inside the bill, they moved the babies every couple days to a different section of the nicu. The bill showed that some section charged up to 20k a night. Those pacifiers that fell on the floor each cost 35 to 50 dollars. The formula they provided when we didn't bring breast milk cost hundreds of dollars.

I don't have any credit card debt, I'm frugal when it comes to trivial purchases, I pay for what I can afford. I even have insurance. But then, there is a bill to pay. To this day, we are trying to get the bill to be a reasonable price. And so far, it seems like it's going to happen. We are very hopeful.

jelliclesfarm3• 7 years ago

I am very sorry that you have to deal with this while celebrating the birth of your children.

Have you considered legal help to navigate this and have someone advocate for you?

foxfired3• 7 years ago

We did, that's why today I am not as worried as I was in those first week. We were advised that, with the insurance and Medical, it's possible we won't have to pay a cent for the babies. My wife medical bills were more reasonable and we already managed to pay them.

asark2• 7 years ago

State insurance & hospital regulators can sometimes be helpful. Might try your state senator or representative's office. Sometimes if the officials are feeling salty they'll get directly involved and fix things for you, but at least their offices usually point you in the right direction for further help.

whymsicalburito• 7 years ago

Wow, that is a horrific situation, I truly hope it turns out well for your family. Does your policy have an out-of-pocket maximum? My HR department always gives us hypothetical situations and the out-of-pocket maximum is often portrayed as the saving grace that makes things like this not destroy your finances. Is this true or is my skepticism well placed?

foxfired3• 7 years ago

The counselors at the hospital told me same thing. The out-of-pocket maximum was set to be $5,000 for the insurance. But they also gave us a ceiling (which I don't remember the exact amount at the moment).

I was advised that to get Medical which, I did right away, and it is supposed to be retroactive.

benmaraschino• 7 years ago

Not always true. That OOP max often only applies to providers who are considered in-network for your insurance plan. Oftentimes, there's no way to guarantee that all the providers you see during an episode of care will be in-network; you could have a surgery with a surgeon who's in-network, and at a facility that's in-network, but get blindsided by a huge surprise bill from an out-of-network assisting surgeon or nurse or anesthesiologist, or by an out-of-network consult when you're in the ICU recovering after surgery. This is one example: https://www.nytimes.com/2014/09/21/us/drive-by-doctoring-sur...

There's been some progress in states (including CA) to cut down on these sorts of billing practices, thankfully, but it's still a major issue elsewhere, even if you have an ostensibly gold-plated health plan. Many plans are starting to remove caps on out-of-network bills, too: https://khn.org/news/2016-ppo-plans-remove-out-of-network-co...

I assume something similar may have happened to OP, but there are a lot of other ways they can run up the bill. These kinds of billing practices are insane and need to stop.

yinyinwu• 7 years ago

I thought that insurance fees were capped at $7 - 10k even with high deductible plans. Even if the bill is split over two years, it's $20k.

How does the insurance bill end up being so high?

munk-a• 7 years ago

This is terrible and I feel for you... but you might have insurance kick in to help you out. The absolutely amoral thing here is that people without insurance (or poor coverage) can end up getting a debt like this placed fully on their shoulders and be chased by debt collection for the rest of their lives.

These costs were totally unreasonable, 35-50 dollars for a pacifier is just absurd and the fact that this price is hidden and reduced from most consumers means that it can continue being the sticker price.

America needs to seriously fix this BS.

ThrustVectoring2• 7 years ago

Whatever you do, don't raid your 401k or retirement plans to pay these kinds of debts. I'd also take a very strong position that you're only going to pay up to your out of pocket maximum, and file a regulatory complaint over any balance billing or failure to cover services above that.

State regulations matter a hell of a lot here. I'm seriously considering moving to Texas because of debtor laws - any health incident can cause one to accumulate a large amount of "debt" in a hurry, and being able to tell creditors to pound sand gives a hell of a lot of peace of mind.

arbuge• 7 years ago

I'm seriously considering moving to Texas because of debtor laws - any health incident can cause one to accumulate a large amount of "debt" in a hurry, and being able to tell creditors to pound sand gives a hell of a lot of peace of mind.

Can you elaborate on this? What is so favorable about Texas law specifically as far as debtors are concerned?

taneq• 7 years ago

They can't possibly expect you to actually pay anything like that, can they? I think for having our first kid (including well regarded obstetrician and a two week stay in the NICU) we paid a total of around $5k. Three cheers for civilized countries with real healthcare!

Not to mention the way they over-serviced you sounds downright exploitative. I wonder if the staff had been covertly told to use as many consumables as possible?

bandushrew• 7 years ago

2 sets of twins, one set spent 3 weeks in prenatal and they went through a bad bout of jaundice that needed care and treatment.

total hospital bill: 0

grecy• 7 years ago

What a very sad story that regular people have to live in these conditions in the richest country in the world.

What has gone so wrong?

jason_slack• 7 years ago

I was born at 5.5 months weighing just shy of 1.8 pounds. I was in a “toaster”, as my dad has put it, for many months. This is in New York.

My parents had no insurance and never paid the hospital anywhere close to the amount. But this was 1977 so cheaper than your bill.

Can HN help out? If you set up a GoFundMe account I will donate or I can send you a gift card to a grocery store of your choice.

Congratulations on your babies and time will fix the financial concerns. For now your babies are the most important thing.

nicudad• 7 years ago

My second child had a problem at birth and out of an abundance of caution was rushed to the NICU unit in a nearby city. I agree this was reasonable. I also agree the NICU unit and hospital are professional, effective, and sincere.

After a few days it was clear there was no ongoing problem and absolutely no issues. He was not a preemie. At this point the bill would have been around $100,000.

But they insisted to keep him longer to be safe and we couldn't say no. Eventually he accumulated various hospital acquired infections and the stay had to be extended.

After six weeks he was released. The bill was $1.5 million.

Parents aren't allowed to say no. If they do it's evidence of neglect. And most parents wouldn't dare to and go with professional opinions.

Entering the NICU was a room where you had to clean your hands and arms thoroughly. This is good. Doctors and staff weren't required to use this room and never did. The argument is they could use the wash stations inside the unit instead.

So, what's the big deal? Well those doctors come in through the same door as visitors and they touch the door handle with their unsterile hands. Then the visitors/parents, having just sterilized, touch that door handle.

I brought this up and it was discarded as nonsense. After all I am not an expert and they are.

Yet still, subsequently, there was my kid, with an infection he got from the hospital. No problem man, only cost me a bit over a million. Not their issue.

polotics• 7 years ago

Thanks a lot. Very helpful to show this to my wife when she gets the idea of a research job in the US: It's. just. too. Dangerous!

t0mbstone• 7 years ago

I can't help but think you might be able to sue the hospital for following unsanitary procedures in the NICU? Have you talked to a lawyer?

tathougies2• 7 years ago

Isnt there an out of pocket max?

pvaldes• 7 years ago

Would be "free" in Spain (free in the sense of being paid by the collective taxes of all workers and with price regulated by the government). There is a law to support fathers of premature babies also

Is strange to hear this histories. USA really feels archaic in this sense.

BrandoElFollito• 7 years ago

This is a horrible situation to be in. My son was born with cardiac and hearing problems (thankfully all gone) and living in France the cost of the care was something I never thought of (during and after). I never saw the price, actually.

It is only recently that you can see how much was spent on your health care, and this requires an action from you (otherwise you would not know).

paulcole3• 7 years ago

Article doesn’t even touch on the environmental costs. Probably the worst thing you can do for the environment is have a kid.

Edit: Why downvote this? It’s like talking about the cost of driving while ignoring all the costs being externalized and offloaded on everyone else.

jelliclesfarm3• 7 years ago

I agree.

Tragedy of the commons scenario.

AnimalMuppet3• 7 years ago

Why downvoted? Maybe two reasons. First, it's off topic. You look like you're trying to find a way to sneak your hobbyhorse into the discussion, even when it doesn't really fit.

Second, by the same logic, the best thing you could do for the environment is go on a murder spree and then commit suicide.

That should appall you. You should respond "No, because..." (If you don't, seriously, please get help rather than committing suicide.)

But what's the reason for your "no"? Because the murder spree is immoral? (It is.) Because suicide would hurt too many people around you? (It would.) Or is it because, despite the environmental cost of your continued existence, you feel that you could make a positive (net) difference with the rest of your life?

But if you can, so can your child.

paulcole3• 7 years ago

Boy, must have been a fun ride down the slippery slope from don't have kids to go on a murder spree.

despite the environmental cost of your continued existence, you feel that you could make a positive (net) difference with the rest of your life?

I definitely do not feel that. I recognize that essentially every person is a net negative on the world (especially myself). But I have already been born and there's nothing I'm willing to do to change that at this time.

I mean I get that people like having kids, but at least acknowledge how stupid it is to have one and then recycle or whatever like it makes some difference.

This is not off topic at all by the way. The article is on the cost parents pay to give birth. But ignores the fact that parents are getting an unbelievable discount by offloading the environmental costs to the rest of the world. If we were serious about combatting climate change, having a child would be all but prohibitively expensive.

KumarAseem• 7 years ago

I think it has raised in most of the countries.

In India, raising a child now is a very tough one. 1) Health Insurance - Not everyone has it and many who have turns out to be not sufficient. 2) Education - Schooling has become extremely expensive. There is not much regulation and schools apply a lot of tricks to get money from you, mainly under the guise of extra-curricular activities or development. They force the parents to pay, and legal recourse isn't available. 3) Health again - With the bad air, water and food that the children are getting these days, a lot of them get some or the other illness on a regular basis, which forces the kids to visit doctors frequently and take medicines. These all doctor visits don't get covered under insurance a lot of times. Kids of today are not developing a strong immune system. To top it all, many parents don't let their kids play outside. They give them a mobile and think they have done their duty.

I forsee a very bad/difficult future for a lot of children.

The cost of raising a child in America has soared (2018)

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