- Tiffany Green, Steven T. Cook, Hoa Vu
- May 2023
- Link to CSRA-2020-2022-T8 (PDF)
Birth cost recovery (BCR) is the practice of billing unmarried, non-custodial fathers for childbirth costs paid for by the state Medicaid program. In Wisconsin, there is an ongoing debate about whether to strengthen or eliminate BCR (WI AB103, 2019–2020). However, we have very little robust evidence on the effects of BCR on child support-related outcomes. In January 2020, Dane County ceased collecting BCR funds while other Wisconsin counties opted to continue BCR collection. This policy change provides a crucial opportunity to rigorously investigate the effects of BCR. As such, we have leveraged the comparison opportunities provided by this policy change to assess the effect of BCR, and its elimination, on child support outcomes in unmarried families.
Data used for these analyses were drawn from the Wisconsin Administrative Data Core (WADC) of Medicaid enrollment and Medicaid claims, child support, and earnings reported to the state Unemployment Insurance system. From WADC2021, we selected all children born from 2016–2021 with an identified birthing parent (N=237,240), limited analyses to the parent’s only child during that time (N=122,151), with active Medicaid enrollment during the birth month (N=83,462). We removed births with missing county locations (N=83,102) and children with a reported spouse in the household at birth (N=65,182).
To determine the changes in outcomes associated with ending birth cost recovery practices, we compare two groups of BadgerCare recipients who gave birth over the period 2016–2021: 1) individuals giving birth on Medicaid who had birth costs imposed (i.e., those living outside of Dane County before 2020 and those living outside of Dane County during the entire period 2016–2021) and 2) with those for whom no new birth costs were assigned (those residing in Dane County in 2020 and 2021).
We find that the birth cost recovery cessation policy in Dane County was linked to an increase in the probability that fathers owed any form of child support, the amount they owed, and compliance with child support orders. Importantly, however, fathers were also more likely to pay child support to the birthing parent after the policy change, and those payments significantly increased after the policy change.
While the policy did not significantly affect paternity establishment or average income, we found suggestive evidence that the policy change was linked to declines in the probability of paternal employment. We also found important racial differences in child support outcomes. Notably, the fathers of Black children more likely to pay child support and an increased amount of support. In contrast, the fathers of White children were less likely to pay child support and the total amount of child support paid declined. Overall, our findings suggest that birth cost recovery cessation may have narrowed racial inequities in child support outcomes, albeit in part due to declines in child support payments among White fathers.