Medicare For All? Start At The Beginning: Cover All Births And Modernize Maternity Care

“Medicare for All” may or may not be at the end of the United States’ long and winding road toward universal health care. An idea as ambitious as extending Medicare to the entire US population presents enormous political and administrative challenges. But short of a comprehensive re-making of the entire system, we have a unique opportunity to design, test, and evaluate the results of how a Medicare for All plan might be crafted and implemented in a controlled way, for a defined episode of care—one that has generated that rarest of political phenomena: decades of broad, bipartisan consensus.

With this post, we establish the rationale for and broad outlines of a national plan for Medicare for All Pregnancies (MFAP). The plan would achieve universal coverage for all services related to maternal, perinatal, and infant care in the US; address major systemic failures in the historic financing and management of care for childbearing families; and seek to remedy chronic disparities in access to high-quality care during pregnancy, birth, and the postpartum year—all while serving as a laboratory for the implementation of Medicare for All across the entire US population.

Everyone Loves Moms And Babies

The legislative and implementation experience of the Affordable Care Act (ACA) confirmed what many have always believed about guaranteed universal health coverage in the US: There are major differences of opinion on how to attain that coverage, and some who do not even agree on universal coverage as a societal goal. But as in life, so too in health policy: Pregnancy and a new baby change everything.

Legislators with ideological objections to government-based solutions have consistently made exceptions for pregnancy. While the ideological rationale driving these exceptions is beyond the scope of this post, the political consequence has been consistent over the decades: alignment of legislators on distant sides of the aisle around policies that guarantee basic coverage and services for childbearing families.

While the American Rescue Plan passed without Republican votes, one of its provisions—providing states the option to extend postpartum Medicaid coverage from 60 to 365 days—had unanimous support in the House as a stand-alone bill. In 2018, just before shutting down the government for more than a month, President Donald Trump signed the Preventing Maternal Deaths Act (HR1318), a law that funded state-based maternal mortality review processes, with unanimous support in both chambers.

Similar bipartisan consensus has driven steady expansions of Medicaid over the years to cover care during pregnancy, birth, and postpartum. Other than the determination of poverty, pregnancy is the only other criterion for Medicaid eligibility. In most states, pregnancy changes the threshold income by an average of 45 percent and in some states by as much as 800 percent. Babies enjoy similar bipartisan support, embodied in the Children’s Health Insurance Program, heavily federally funded and designed to extend Medicaid coverage well past normal income eligibility to families with infants and children.

In fact, the landmark 1986 law known as “EMTALA”—which requires hospitals to provide emergency care for everyone who crosses their thresholds regardless of ability to pay—has become such an essential part of the US health care landscape that we often forget what it actually stands for: “Emergency Medical Treatment and Active Labor Act.” With EMTALA, Congress clearly communicated its belief that delivering a baby is an exceptional situation with inherent risks. Even the least sympathetic members were cognizant of what a barbaric spectacle it would be if US hospitals cast uninsured people out into the street to give birth.

A Maternity Care “System” That Isn’t

For all these bipartisan efforts, universal coverage for pregnancy has never been achieved. Although uninsurance at the time of delivery is uncommon, more than one in five people lack insurance either in the month just before pregnancy, during pregnancy, or in the postpartum period—a problem disproportionately affecting Black and Indigenous people of color.

Uninsurance is a major driver of maternal and infant mortality. And while Medicaid expansion has been shown to reduce both, there remains one glaringly inconvenient truth about how: Medicaid pays only about half what private insurers pay for birth, even though the needs of the Medicaid-insured population are often greater. This payment disparity sets up a two-tiered, unequal system-of-care delivery, under which Medicaid-insured individuals have fewer care options, receive care in lower-performing hospitals, and are more likely to live in a maternity care “desert” with no access at all.

Thanks to the cumulative effect of this non-system for the insured and uninsured alike, maternity care in the US is a national disgrace. The US suffers from the highest maternal mortality rate in the developed world, unconscionable racial disparities in access and outcomes, and dangerous declines in the availability of maternity care in nearly all regions of the country. And yet, we still pay dearly: Childbirth and newborn care are the most common and costly hospital conditions for Medicaid and private insurance, and the United States spends more on maternity care than any other country on earth.

Because of these fundamental and historic challenges, maternity care was in crisis well before the emergence of COVID-19. But pandemic-related job losses have exacerbated these chronic problems with a large increase in uninsured births and a shift in the overall payer mix from private plans to Medicaid. This is widely expected to present a massive additional strain on state budgets and reduce revenue for maternity care providers and hospitals. Combined with the health and social impacts of the pandemic itself, these shocks to the system have escalated the US maternity care crisis to a public health emergency.

Toward A Maternity Care “System” That Is

As these problems are all systemic in nature, the best way to address and remedy them is with a bold, comprehensive, systemic reform strategy. Our proposed plan, MFAP, seeks to eliminate uninsurance for pregnancy, birth, and the first postpartum year for both the childbearing parent and newborn; introduce payment parity between public and private health insurance coverage; and transition to high-value, equitable care by fostering implementation of evidence-based interventions and innovative care models. The end result would be a true maternity care system, improved outcomes for all families, reduced disparities, and cost savings sufficient to fund extending maternity and perinatal coverage to everyone.

The uninsured, people currently purchasing individual insurance on the exchange, and those eligible for or enrolled in Medicaid would be automatically enrolled in the MFAP program. Employers could continue to offer private insurance that meets federal standards or pay a contribution for their employees to enroll in MFAP. The program would cover all care and services for pregnancy and birth, as well as postpartum and newborn care through the first year.

Ideally, because prenatal, birth, postpartum, and newborn care are essential services and preventive in nature, there would be no out-of-pocket expenses for those enrolled in the program. As such first-dollar coverage might not be politically palatable, an alternative model would allocate cost sharing based on income, capping out-of-pocket costs per pregnancy/newborn. Lower-income families would have no out-of-pocket costs. The plan would eliminate uninsurance, drastically reduce insurance “churn,” and result in at least half and potentially up to all childbearing people and infants having continuous insurance from a single payer.

From the outset, the program would wield obvious and considerable market power, which would allow it to drive meaningful clinical improvement and cost savings by shifting practice patterns toward evidence-based care. It would represent a sweeping and powerful opportunity to build, test, and implement value-based payment and care delivery models, and to direct adequate payments to high-value care including birth centers and midwife-led care models, home visitation, doulas, and integrated behavioral, social, and mental health services. Each of these innovations has been the subject of ad hoc policy discussions and pilot projects for years; nonetheless, they have failed, for obvious reasons, to gain traction in a hospital-centric and procedure-driven payment system, and they remain beyond the reach of almost all families in our current maternity care “system.”

The MFAP program would also have an unprecedented opportunity to end the current two-tiered system and achieve payment parity across populations. As a result, a transition to the program would result in an immediate substantial increase in revenue for providers and facilities formerly serving primarily Medicaid and uninsured populations. This added revenue would provide a needed stimulus to strengthen and stabilize safety-net providers.

For childbirth, the traditional fee-for-service payment model, with its emphasis on higher-cost physician labor and perverse rewards for surgical interventions and bad outcomes, is not only too expensive, but dangerous. Investing in care delivery transformation would require a wholesale shift to alternative models that align payment with value and population health goals. Continued incremental expansions to the Medicaid program and piecemeal attempts at reform via pilot programs are simply insufficient for the scope and magnitude of the crisis we face. The entire system must be re-imagined around equity and re-architected around better, more holistic ways of financing and delivering care for childbearing families.

Funding The Program

How would we finance such an ambitious national plan? The answer is we already do. The federal government is the overwhelmingly largest single funder of maternity care in the US. Federal matching funds for Medicaid cover nearly half of all births in the country. Thanks to the bipartisan support for maternal and child health discussed earlier, childbearing families enjoy enhanced federal Medicaid matching funds compared with non-pregnant adults, totaling an estimated $10 billion annually, and growing as more states adopt Medicaid expansion.

Federal funds also support maternal and child health (MCH) initiatives through multiple programs and financing mechanisms spanning many departments and agencies. This includes insurance for government employees, subsidies for plans purchased on state exchanges, and payment for pregnancies occurring in populations already enrolled in Medicare, TRICARE, Indian Health Services, and Veterans Affairs. In addition, programs and services are funded through MCH block grants to states. According to one analysis, the identifiable federal funding for MCH programs totaled $57.5 billion in 2006 dollars.

By enabling care delivery models proven to reduce cesarean section deliveries, preterm births, and hospitalization costs, MFAP could generate modest improvements in outcomes sufficient to fund true universal coverage pregnancy and related care. And this is before the considerable savings from administrative efficiencies generated by the wholesale movement to a simple, global payment rate and standardized benefit design, and the elimination of massive, duplicative rate negotiation and service and payment adjudications between hundreds of payers and thousands of provider practices and facilities.

As for direct financing, MFAP should be funded by premiums consistent with the actuarial cost of pregnancy for all Americans, normalized across the entire population. This approach, consistent with the spirit of this proposal, recognizes that there are wide variations in both the actuarial and actual cost of maternity and perinatal care, especially when comparing the experience of privately insured versus Medicaid-insured populations. But all Americans already bear the higher costs of the latter population through higher federal and state taxes, and through substantial cross subsidy at the provider level. A fully fleshed out MFAP proposal would address both these obvious and hidden collective subsidies through introduction of parity across providers, through the use of global reimbursement rates, adjusted only for regional differences, not member demographics; and use of an aggregated per-member-per-month rate for funding of the program, also adjusted only for region.

A Quick Note On What It Would Look Like

How best to implement the proposed MFAP program? While the temptation is always great for architects of bold health reform plans, there is no need to reinvent the wheel here, and there are significant operational and political advantages in not doing so. Like broader Medicare for All reform plans, the proposed program is agnostic with regard to model; it could be implemented in numerous ways, ranging along a continuum from direct federal management to the use of private market forces. MFAP could be operationalized via the current infrastructure for the Medicare program, using traditional fiscal intermediaries, or along the lines of the Medicare Advantage program. It could also be implemented using the proposed infrastructure for the “public option” included in the original ACA.

Summing Up

We recognize the enormity of the task proposed in this post; we are aware of the many thorny organizational, financial, political, and clinical challenges that the proposed MFAP program entails. This is why the first step toward implementation would be a robust national commission to turn the broad outlines of this proposal into a working architecture, complete with detailed and feasible financial projections.

But the task, monumental as it seems, is both worthy and long overdue. The state of maternity care in the US, for all the money we spend on high-cost procedures and neonatal intensive care units, is an international embarrassment. And unlike stakeholders in other realms of health care who oppose change as systemic as what we are proposing here, few who work in US maternity care would disagree that the non-system is broken and needs reform. Creating a true maternity care system grounded in equity, evidence-based practice, and scaling care models that work would greatly improve outcomes and lower overall costs—and it would be the right thing to do for all families.