Lipscomb Seeks to End “Birth Tax”

MILWAUKEE – County Board Chairman Theodore Lipscomb, Sr. is working to end a practice known as “birth cost recovery,” a process whereby county child support agencies pursue the collection of Medicaid-related birth costs from unmarried or non-custodial fathers.

“Birth cost recovery is really a birth tax that only applies to low-income families. Milwaukee County should end the practice of birth cost recovery, which doesn’t add to child support funds that families receive and may lead to adverse health effects. Ending the birth tax could help reduce infant mortality and lift families out of poverty by eliminating a burdensome cost to low-income working families,” said Lipscomb. 

The Finance and Audit Committee considered Lipscomb’s proposal today and unanimously recommended adoption by the Board of Supervisors. Wisconsin is one eight states that implement provisions of federal law that allow child support agencies to recover medical costs for births funded through Medicaid.

County child support agencies are permitted to keep 15% of the costs paid by the father while the remaining 85% goes to repay the state and federal government’s Medicaid expenditures.

Milwaukee County collected $21,394,127 in birth recovery costs from 2011 to 2016, and retained $3, 209,119. None of those dollars were distributed to families receiving child support.

According to ABC for Health, some health care providers believe that birth cost recovery is a barrier to prenatal care and is a stressor to pregnant mothers and their unborn children, leading to adverse health effects for mother and child.

Several efforts to reform the practice are underway. Starting January 1, Dane County will discontinue the practice of pursuing birth cost recovery for any new child support orders.

Wisconsin Governor Tony Evers proposed ending the practice of pursuing birth cost recovery as part of his 2019-20 budget, but that provision was not adopted.

A bill in the Wisconsin state Senate proposes additional reforms, including increased funding to the Department of Children and Families to offset the costs of eliminating the practice.

NOTE: This press release was submitted to Urban Milwaukee and was not written by an Urban Milwaukee writer. It has not been verified for its accuracy or completeness.