Congress Should Preclude Child Support Agencies From Recovering Medicaid-Covered Prenatal Birth Expenses

In some states the child support enforcement agency collects hospital and doctor birth costs paid for by Medicaid for a nonmarital child from the father of that child. The Senate Finance Committee's welfare legislation does preclude state child support agencies from recovering Medicaid-covered prenatal, birthing, and perinatal expenses from the father. Nonetheless, the welfare reauthorization bill passed by the United States House of Representatives does not address this issue.

Congress should adopt the provision from the Senate Finance Committee's welfare reauthorization bill that prohibits child support agencies from recovering Medicaid-related birthing costs from noncustodial parents. Most state laws permit a mother to seek reimbursement from the father for costs associated with childbirth when paternity is established. Yet this policy becomes problematic when the Medicaid agency, not the mother, has paid these expenses and the child support agency is seeking reimbursement of the Medicaid expenses. This adds a significant state debt onto father's child support bills that does not tangibly benefit mothers or their children. Besides adding a significant debt onto the fathers' child support bills, it also goes against many government objectives of the Medicaid and family law systems.

Poor pregnant women are eligible to receive Medicaid. As part of the process for applying for Medicaid, the mother generally must cooperate in establishing the paternity of her child. The child support agency uses the information provided by the mother to initiate a paternity action against the alleged father. During the paternity action, the child support agency seeks reimbursement of the birth costs paid by Medicaid. This reimbursement becomes a debt that the father owes to the government and that is added to his child support bill.

There is support for precluding the child support agencies from collecting this fee. Recently, the Medical Child Support Working Group, mandated to be convened by the PRWORA 1996 Welfare Law, recommended that Congress pass legislation to ban the practice of child support agencies seeking this fee. As part of the Child Support Distribution Act of 2000, the House passed legislation by a vote of 405 to 18 that included a prohibition of this practice. Though the Senate failed to act on that legislation, the current Senate welfare reauthorization proposal includes this restriction on recouping Medicaid costs.

There are many reasons Congress should adopt the Senate bill's provision banning child support agencies from recouping Medicaid-paid birth expenditures. First, the recouping of Medicaid costs from noncustodial parents discourages low-income pregnant women from seeking prenatal care. Low-income mothers understand that if they seek prenatal care, their partners will have to pay at least some if not all of the bill. Yet their partners are struggling to support themselves, and the mothers realize that any money their partners owe to the government will be less money for their future child. Evidence indicates that this discourages them from seeking prenatal care.ⁱ

If they do not get this prenatal care, it may jeopardize maternal health or result in physically impaired children. Low-income mothers with inadequate health care services are particularly likely to be at risk of complications from pregnancy. Congress designed the Medicaid program to ensure that pregnant woman did not avoid obtaining prenatal care because of financial considerations. Not obtaining prenatal care is not only tragic for the child and parents, but may also result in the public incurring additional expenses to pay for the long-term care for mothers or their children who are negatively affected by the lack of prenatal care.

Further, this state child support policy goes against the intent of Congress in creating the Medicaid program. In 1990, Congress simplified the Medicaid coverage process to encourage low-income women to seek prenatal care. As noted by the Medical Child Support Working Group:

Congress recognized that eliminating the cooperation requirement would have fiscal consequences. States would no longer be able to seek reimbursement for prenatal, birthing, and post-natal Medicaid costs from the fathers of these children. Congress believed that the potential savings in human and fiscal terms, however, far outweighed the potential revenue loss. Thus Congress essentially adopted, a decade ago, a clear public policy that recognized that the value of encouraging mothers to seek and receive prenatal care far outweighed the potential cost recoupment from non-marital fathers. Despite this clear public policy, some State child support agencies continue to pursue prenatal, birthing, and post-natal costs after the child is born. . . [This] runs counter to the intent of Congress in removing the child support cooperation requirement.ⁱⁱ

Congress' goal of preventing birth defects caused by the lack of prenatal care is being inadvertently harmed by federally funded child support agencies.

This policy of seeking reimbursement for Medicaid expenses also deters non-custodial parents who might otherwise voluntarily acknowledge paternity. These parents want to support their children but will continue to avoid the formal child support system as long as government debt interferes with their ability to support their children. There are tremendous benefits to a child having paternity established:

Parentage determination does more than provide genealogical clues to a child's background. . . It is a prerequisite to securing financial support for the child and to developing the heightened emotional support the child derives from enforceable custody and visitation rights. Parentage determination also unlocks the door to government provided dependent's benefits, inheritance, and an accurate medical history for the child.ⁱⁱⁱ

In recognition of these benefits, Congress adopted a policy of providing incentive funding to state child support agencies to increase paternity establishment. The imposition of large medical debts deters the achievement of that goal without reliance on more expensive court or administrative procedures. This has long-term repercussions for the ability of fathers to remain in their children's lives. Many times the mother and father have an ongoing relationship and want to establish the paternity of their child.

Even if paternity is established through the family court system, the child support system imposing large debts solely for the benefit of the government only deters achieving other goals of the family law system. First, it is not in the best interest of the child to impose a large debt upon the father that may deprive him of the ability to provide needed financial support to the child. Second, imposing large debts on noncustodial parents that do not benefit their children only serves to increase the likelihood of conflict between the two parents.

Many low-income noncustodial parents can barely afford to pay their child support bill much less an additional fee that will not support their child. The average income of low-income noncustodial parents who work and do not pay their child support is approximately $5,627 per year^iv. If parents acquire unrealistically high government debt at the establishment of paternity, they will be discouraged from ever paying child support because the bill will seem beyond their ability to pay. This is particularly true when a large portion of the child support bill does not directly benefit their children.

Finally, even if the noncustodial parent is able to pay the birth costs and his child support bill, this charge only serves to further impoverish the poorest parents of our society. States participating in the federal Medicaid program must make Medicaid available to every pregnant woman whose income is at or below 133 percent of the federal poverty level. Thus, for a family of two, her income must be less than $15,880 per year to be eligible for Medicaid in the 48 contiguous states. Low-income women tend to partner with men with similar economic resources. Taking money from these extremely poor fathers only serves to deprive them of the ability to tangibly provide assistance to their children. For custodial parents the charging of this fee only makes it less likely that they will receive child support much less any additional financial support from their partners. The children are also more likely to remain in poverty because their fathers are using their income to repay a debt to the government. This extra fee poses an undue financial hardship on every member of low-income families.

The negative impact of this policy can easily be shown through the substantial anecdotal evidence of the hardship this debt causes for parents and children. One family's situation best exemplifies the problems created by charging this fee. A father and mother had a child who was born disabled. At the time of the paternity establishment both the mother and father were living together and shortly planned to marry. Despite their cohabitation, the State charged the father $61,689 for the birth costs for this baby. Now the child support agency takes money from the married parents every week, which is used to reimburse the state for the birth costs and deprives the disabled child of needed financial support. In addition, any tax refund that this family receives will automatically go to the child support agency. This is money that this family desperately needs to avoid slipping further into poverty. This story is not unique to this family, and there are many more examples of the negative impact this has on families. Congress should prohibit federally funded child support agencies from seeking reimbursement for birth costs paid by Medicaid.

ⁱSee MEDICAL CHILD SUPPORT WORKING GROUP'S REPORT, 21 MILLION CHILDREN'S HEALTH: OUR SHARED RESPONSIBILITY (June 2000).

ⁱⁱSee id.

ⁱⁱⁱSee JEFFREY A. PARNESS, DESIGNATING MALE PARENTS AT BIRTH, 26 U. MICH. J.L. REFORM 573, 574 (1994) (CITING U.S. COMM'N ON INTERSTATE CHILD SUPPORT, SUPPORTING OUR CHILDREN: A BLUEPRINT FOR REFORM).

^ivSee ELAINE SORENSEN & CHAVA ZIBMAN, URBAN INST., A LOOK AT POOR DADS WHO DON'T PAY CHILD SUPPORT 3-4 (Sept. 2000).