Maternity Hospitals Fear a Medicaid Squeeze

Improved birth rates are a stated priority for President Donald Trump’s administration—but proposed budget cuts could make it harder for many Americans to afford a safe, healthy pregnancy.

Last week, House Republicans narrowly passed a budget resolution that calls for an $880 billion reduction to the Department of Health and Human Services (HSS) budget over 10 years. The proposed plan doesn’t explicitly call for Medicaid cuts, but it would be impossible to achieve that level of savings without slimming down the program; Trump has promised not to touch Medicare but hasn’t extended the same protections to Medicaid, which provided health care coverage to more than 72 million people as of October 2024.

If Medicaid coverage is cut or reduced, there would be “profound” effects on maternal and infant outcomes, Dr. Sharon O’Leary, chief health equity officer and medical director of data analytics at Trinity Health Michigan, told Newsweek, “no question.”

More than 40 percent of U.S. births were covered by Medicaid in 2023, according to the independent health policy research organization KFF. In some states, that share is significantly higher—like in Louisiana, where 64 percent of births were financed by the program.

“There are well-known disparities in maternal and infant mortality, and our fear is that we’re going to see that gap widen [if Medicaid coverage is cut],” said O’Leary, who is also a board-certified obstetrician-gynecologist (OB-GYN), “especially for our most vulnerable patients, who are Black and brown patients, or rural families and those living with low income.”

Newsweek spoke with several OB-GYNs and clinical chiefs at facilities earning five out of five ribbons on our America’s best maternity hospitals ranking, determined in partnership with data firm Statista. Every one of them shared O’Leary’s concerns—and her sense of urgency.

Why Is Medicaid so Vital to Maternity Care?

Depending on the region, anywhere from a quarter to two-thirds of babies are delivered under Medicaid and rely on that coverage throughout their infancy, according to data that leading maternity hospitals shared with Newsweek.

Health care in the United States is expensive, but maternity care is particularly costly—for our government, health systems, insurance companies and individuals alike. Live births are the most common reason for an inpatient hospital stay. Without insurance, the average cost of giving birth is $18,865. (That figure jumps to $26,280 if the child is delivered by cesarean section.)

It would be “exceedingly hard” for someone to pay for their pregnancy out of pocket if their Medicaid coverage were rescinded, O’Leary said.

For a normal pregnancy with no complications, mothers are encouraged to visit their OB-GYN between 10 and 15 times. Each of those visits bears a cost, along with the price of any required imaging or medications. Complications occur post-pregnancy, too. When an infant is born under Medicaid, their state is required to provide coverage for the first 12 months of their life and fund pregnancy-related expenses for at least 60 days postpartum.

These visits before and after pregnancy are vital to ensure the best possible outcomes for both the mother and the baby, Dr. Erika Werner, an OB-GYN and president of the physician organization at Tufts Medicine, told Newsweek. But even before pregnancy, having access to quality health care can improve the odds of a smooth delivery and a healthy child.

“We’ve learned a lot over the last decade about how important it is to enter pregnancy as healthy as possible and choose the timing of your pregnancy to fit your health status,” said Werner, who reported that more than half of Tufts’ obstetrics patients are on Medicaid. “I worry most that people won’t have access to preventative care going into pregnancy [if the program is cut].”

Dr. Daniel Roth, executive vice president and chief clinical and community division operations officer at Trinity Health, echoed that concern.

“We know proactive care in a prenatal setting has a significant impact on long term outcomes,” he told Newsweek. “Robust prenatal care makes a difference, and that really hinges on access.”

“If you don’t have access to those services,” he continued, “you don’t avail yourself of them.”

How Could Medicaid Cuts Harm Health Care Access?

Historically, research has proven that people are less likely to access health care services when those services are unaffordable, Roth said. Medicaid expansions under the Affordable Care Act have led to improved utilization of health care services—and when care is more affordable, lower-income populations report more financial security, according to a KFF analysis.

Coverage expansions have also been associated with a 17 percent reduction in hospitalizations during the first 60 days postpartum, according to a 2023 study published in the academic journal Health Affairs.

It’s maternal instinct to want the best care for your future child. But if expecting families lose Medicaid coverage, they may have to choose between paying for that OB-GYN visit or putting food on the table.

“We believe—and history tells us—that if you reduce people’s [health care] coverage, they will not come to these services as much,” Roth said. “They’ll show up later in their pregnancies, without all the necessary proactive care. That will not only make their care and their deliveries more complicated, but their outcomes more challenging.”

This could also add to the mounting financial stress at maternity hospitals across the country, health system leaders agreed. Over 100 U.S. hospitals have closed their obstetric units since 2022, often citing economic pressures and dwindling demand.

One issue is that Medicaid reimbursement rates for the service are “grossly inadequate,” according to Dr. Joseph Gobern, chair of the OB-GYN department at Main Line Health. Oftentimes, maternity services are sacrificed first when a health system is struggling financially.

“We receive approximately 55 cents to the dollar of the care that’s provided,” Gobern told Newsweek. “We continue to provide high-quality care and identify efficiencies in doing that, but it’s really an unsustainable rate to provide safe maternity care.”

As maternity hospitals shutter, 1 in 12 American women find themselves in “maternity care deserts” with limited to no access to care. In 2024, more than 35 percent of U.S. counties were considered deserts. The pregnant women who live there must travel to receive care, leading to heightened demand and longer wait times at the surviving facilities.

State-directed payment programs could feel a ripple effect from the cuts, Dr. Marjorie Bessel, chief clinical officer at Banner Health, told Newsweek. Those funds augment the underpayment that care providers receive for Medicaid services, and without them, health systems could be hard-pressed to continue funding maternity care at their current rates.

The fallout would be substantial. Banner Health delivers 36,000 babies per year across its six-state footprint, and all of those delivers could be impacted if government coverage shrinks, Bessel said: “Think of how many kindergarten classes that is!”

“If Medicaid is making up a significant percentage of the patient population that you care for, and you have to reduce or potentially eliminate programs, that not just affects those that have Medicaid insurance,” she said. “That’s going to affect other individuals as well, including those that may be commercially insured.”

Under the Emergency Medical Treatment and Labor Act, emergency departments must treat or stabilize anyone who walks in their doors, regardless of their ability to pay. Care must be provided, whether or not Medicaid is going to pay for it. That could mean more deliveries in the emergency room—for which hospitals would foot the bill.

“Ultimately,” Roth said, “we all pay when people don’t have coverage.”