Financially preparing for a baby

For many, having a child is a milestone and an exciting time for expectant parents. However, the delivery in and of itself — especially at a hospital — can be extremely expensive and potentially derail future financial goals.

To avoid being caught off-guard due to a hefty medical bill, here are all of the costs involved with giving birth, the average cost of delivering a child in the U.S. and what you can do to financially prepare.

How much does it cost to have a baby?

The cost of having a child in America will vary based on several factors. These factors include the birthing facility costs and location, the delivery type, the length of stay, any medications taken — like an epidural — and any complications that may arise during the birthing process.

The total cost will also depend on health insurance details and whether or not the birthing facility accepts health insurance. For example, some people choose to forgo birthing in a hospital and instead opt for a birthing center, which may not accept all forms of insurance.

Cost of a birthing center vs. a hospital

Birthing centers focus on holistic birth and typically don’t offer the same medical options as hospitals, like epidurals and labor induction, making them an option for those with low-risk pregnancies.

Hospitals are medically considered to be the safest places to give birth, so birthing centers aren’t ideal for people with preexisting conditions that may put them at risk for complications. Even though birthing centers are typically run by midwives and may have a resident OB/GYN or pediatrician on staff, birth centers aren’t considered medical facilities. They are typically free-standing buildings, although some may be attached to hospitals.

People generally choose to give birth in these centers due to the comfortable and serene environment, the increased control over their birth process and the lower costs. In most cases, the majority of the cost of a birthing center comes from midwifery services. The average prenatal care and delivery without complications costs around $8,309 but can range from a low of about $1,800 to more than $18,000 without insurance.

Compared to delivery costs in a hospital, those with low-risk pregnancies who can assume the risk of a doctor not being readily available and want a more natural birthing experience can save thousands of dollars at a birthing center.

Vaginal vs. c-section costs

In the U.S., vaginal deliveries have been the most popular — and least expensive — delivery option for many years. According to the latest CDC data, only 32.2 percent of live births in the U.S. were cesarean (c-section) deliveries in 2022.

C-sections are typically more expensive than a vaginal delivery because they’re an intensive surgical procedure and thus require a longer hospital stay than vaginal births. There are also surgical resources like anesthesia and additional fees associated with c-section procedures that don’t come with vaginal births.

Here are the average costs of both delivery methods with and without insurance:

Despite the higher costs and longer recovery, there are medical reasons why someone might elect a c-section over a vaginal birth. A c-section may be necessary to protect the birth parent and the baby due to complications during pregnancy, an emergency during labor and delivery or if the birth parent has a preexisting condition, like diabetes.

Additional hospital delivery charges

Knowing what you’re paying for when giving birth at a hospital is important. Between the fees, room costs, blood work and ancillary recovery expenses, the costs can add up quickly.

As many as 80 percent of American medical bills contain errors, according to experts, so asking for an itemized receipt and reviewing it against your insurance coverage (if you have it) can be a valuable effort. If any items seem out of line, you can check information against the Healthcare Blue Book, a free online tool. Hospitals are also required to facilitate cost transparency per federal law, so check costs on your healthcare facility’s website against what you are charged.

The charges and cost breakdown will look different for every parent, depending on the ancillary resources they choose to pay for. For example, anesthesia will only be charged to those who choose pain management, and only people who elect to have a certified nurse midwife will be charged for that service.

Also, it’s not uncommon to receive two bills — one for the birth parent and one for the newborn. However, the newborn’s birth should be covered under the Newborns’ and Mothers’ Act of 1965, so to have that pediatric care covered, the baby will need to be enrolled in the birth parent’s health insurance plan within 30 days of being born.

Breakdown of costs by states

The average cost of birth varies widely from state to state, making it difficult to financially plan for the cost of labor and delivery when looking at the national averages.

Here are the top five most and least expensive states in the U.S. to give birth before health insurance, considering there are no complications that need to be accounted for in the total cost.

Most expensive states to give birth 

Least expensive states to give birth

Childbirth costs vary by state due to a potential combination of provider prices and intensity of birthing cases in that state.

Other costs to consider

In addition to the delivery costs and hospital bills, there are a plethora of costs that come with being a parent. In fact, the average cost of your baby’s first year could cost you a whopping $18,720, according to figures from the Brookings Institution. While this cost will depend on how many children you already have and how many resources you have at your disposal, it’s no secret that children are an expensive investment.

• Baby food: $540 to $1,380.
• Baby formula: $1,200 to $1,500 depending on the brand used.
• Baby room furnishings: From $150 to as much as $4,000 or more
• Diapers: $510 to $930.
• Stroller: $100 to $1,000. 
• Car seat and carrier: $80 to $400.
• Baby monitor: $25 to $400.

How to pay your hospital bills after giving birth

Even though it’d be ideal to have your birth go exactly to plan, that’s not always the case. If you get hit with a higher bill full of emergency costs or stay longer than you anticipated, it can be anxiety-inducing. However, financing options can make the amount more manageable.

• Health insurance: Routine prenatal, childbirth and newborn care are essential services covered by all qualified health insurance plans. Depending on the insurance and the type of plan, health insurance can shave thousands off your hospital stay.
• Medicaid: Much like employer-sponsored health insurance, Medicaid coverage includes prenatal care, labor, delivery and medically necessary costs. Medicaid is offered in all states for qualifying low-income people, including those who are pregnant.
• Financial aid from the hospital: Some hospitals may offer financial assistance if you don’t have the means to pay for costs yourself or you don’t have health insurance coverage. Depending on the hospital, the assistance available may be based on your household income in relation to the federal poverty level.
• Personal loan: A personal loan can take the lump sum hospital bill and make it more manageable by breaking it up into monthly payments. While it shouldn’t be the first resort due to potentially high interest rates, it can be used as a tool to offset lost income due to unexpected expenses. You can also calculate expenses before getting a loan with a loan calculator.
• Alternative financing: There are plenty of federal, state and local organizations dedicated to assisting new parents who don’t qualify for Medicaid. These organizations range in support, from helping people find affordable medical care to addressing food insecurity.

Ways to plan ahead for having a baby

The best thing an expectant parent can do for themselves is to financially plan for every possible scenario during their childbirth. Aside from planning out the intended birth method and facility, there are other ways to ensure no financial hardship down the road due to the costs associated with labor and delivery in the U.S.

• Create space in your budget: If planning for a pregnancy, start making space in your monthly budget for the anticipated birthing costs as soon as possible or as soon as you see those two pink lines. Assess your weekly spending and see what ancillary expenses you can cut out to allocate more funding toward a column dedicated specifically to childbirth.
• Stay in-network: If you can, try to stay in-network whenever possible. Choosing pediatricians, hospitals and doctors that are in-network will ensure that your costs are covered, at least partially, by your insurance.
• Know your insurance coverage: When crafting your financial plan, do your research and know what your insurance covers regarding childbirth, and keep an itemized list of your potential out-of-pocket costs.
• Keep other accounts in mind:  Don’t forget to consider your other accounts for your child, like a future savings or college fund. The best way to do this is to set up an account after the child is born that earns interest. To ensure each payment is submitted, set up an automatic deposit that submits a set amount of money per month into your child’s future account.

The bottom line

While childbirth costs vary widely in the U.S. based on multiple factors, even the least expensive hospital costs are still a large chunk of change. However, with good planning and ample research, it’s possible to lower those costs substantially.

You shouldn’t need to worry about how you will pay your bills while caring for a newborn. Knowing your needs and resources at your disposal are the keys to making your post-childbirth repayment as stress-free and smooth as possible.