What’s the Worst Month to Have a Baby? (Financially)

Dec 28, 2023

Financially, January is the worst month to have a baby thanks to the two American hellscapes that are taxes and health insurance. 

Nailed it! When it comes to family finances, there’s a worst month to have a baby, and the Sharicks are right on schedule for it. I’m due with my second baby in late January 2024.🙌

This blog post explains why my timing is suboptimal and what would have been better instead. I’ll use actual figures from my family’s healthcare costs after insurance. 

I’ll help you measure your own expenses and explain ways you can do this better than me. Also, it’s a bit of a therapeutic vent sesh.

When conducting research for this post, I ran across several articles that speculated whether people would actually let insurance and tax considerations intrude on these intensely personal moments in their families’ lives. (My suspicion is these were all written by folks with access to primo health insurance coverage, who delivered babies when it cost $72.) My response to this is Oh, hell yes we would. 

Even with insurance, my family will pay about $10,000 out of pocket to have a baby. This is in addition to the >$500 monthly premiums we pay just to keep health insurance in place.

Impacting women more generally, we now know that the gender wage gap is largely because of motherhood and that financial insecurity spikes around childbirth. So, yeah, you could say the thought has crossed our minds.

Health Insurance: The Sharicks Brace for Our Out-of-Pocket Max

Assuming things go to plan, I’ll be delivering a baby in January 2024. My due date is the 29th to be exact, so it’s highly unlikely I’ll be squeaking one in before the buzzer in 2023. 

With near certainty, this means I’ll have a major healthcare event that pushes my family to our insurance out-of-pocket max of $14,900 in early 2024. Virtually all of my prenatal care on the other hand (i.e., bloodwork, ultrasounds, the arbitrary peeing in a cup), has occurred in 2023, a separate coverage year. Because my 2023 costs haven’t been high enough to meet our deductible, I’ve paid most of them out of pocket.

A little background on our insurance coverage… My family is covered by a high-deductible health insurance plan through my husband’s employer. Their only insurance option is this high-deductible plan. Given that I’m self-employed, this makes his insurance the only logical choice for our family.

Our coverage comes with individual deductibles of $5,600 and a family deductible of $11,200. We pay out of pocket for healthcare until we reach these deductible levels, at which point a 50% coinsurance kicks in until we’ve forked over our in-network, family out-of-pocket max of $14,900.

Graciously, my husband’s company supplies a health reimbursement arrangement (HRA) account to help defray its employees’ deductible expenses. They contribute $6,000 a year for us to use as a family. 

Here’s what we’ve already spent in 2023 & what we’re bracing for in 2024. 

  • 2023: Roughly $1,000 in prenatal expenses, some of which we covered with the HRA
  • 2024: In-network, family out-of-pocket max ($14,900) for birth, minus our employer-funded HRA account ($6,000) = $8,900 we’ll pay out of pocket to have a baby

To manage this mischief, I got a price estimate of what to expect by calling my insurer to pre-clear all labor and delivery expenses. The insurer confirmed the hospital I’ll deliver at is in-network and that I should be prepared to pony up my family’s out-of-pocket max of $14,900 in 2024.

Also, you’ll notice I’m planning for our family out-of-pocket max, and not my individual one. Faster than you can say AGPAR, your newborn baby becomes a separate person from you with their own deductible in the eyes of the insurer.

Child Tax Credit = $2,000

The timing of this one is salt in the wound. Babies are expensive, but they’re also sweet little tax credits.

The Child Tax Credit is an annual tax credit that families (earning ~$400,000 or less) can claim worth up to $2,000 per child. This is a credit (and not a deduction), which means it directly offsets your tax bill dollar for dollar come April. 

Because I’ll deliver in January of 2024, I’ll have to wait until April of 2025 to see any benefit for this baby. If they would have been born on December 31st of 2023, my husband and I would have been able to claim the tax credit for this year, which we’d see in April of 2024. 

The Silver Lining

Looking on the bright side, hitting our family out-of-pocket max in early 2024 has its perks. Seeking any form of healthcare next year will be a nondecision. We’ll be paid up to our annual out-of-pocket max, so there’s no waiting out coughs or mild fevers at home in fear of a $200 urgent care bill.

Sadly, these are the tradeoffs parents are forced to make in the medical insurance hellscape that is America in the 2020s. Every time your child is sick and you have high-deductible health insurance (which, many of us do), you’re faced with the choice of letting them ride it out at home or risk incurring a couple hundred dollar bill for what usually turns out to be the common cold or indigestion. It’s a shame.

There’s also an extreme scenario worth mentioning that could make my costs look like child’s play. That would be if I headed into the hospital for labor and delivery by New Year’s Eve and ended up delivering on New Year’s Day or later, the next year. Or, it could be as simple as delivering a premature baby in late 2023 and then remaining in the hospital for several weeks through early 2024. 

We’d pay two separate family out-of-pocket maximums in two separate insurance coverage years. As my daughter would say, crikey-yikes!

Financially “Optimizing” for Labor & Delivery

Here are the cards you can play to financially “optimize” your labor & delivery.

  • Time your pregnancy to line up with one insurance year
  • Consider higher-premium, lower-deductible health insurance coverage
  • Pre-clear with your insurer that your delivery location is in-network
  • Negotiate medical bills if you’re facing financial hardship

The moral of the story is if you have the ability to somewhat time your pregnancy, shoot to conceive December through February. Now, I recognize that conception is more of an art than a science, but it doesn’t hurt to stack the financial odds in your favor from the jump.

You won’t start prenatal appointments until you’re at least 8 weeks along, so this keeps almost all prenatal care, triage, labor & delivery, and after-birth care in the same plan year. Set your pregnancy budget at your out-of-pocket max and be done with it. 

Conversely, like we learned from my situation, January is financially the worst month to have a baby. You’re spreading insurance coverage over two years and have to wait a full year to benefit from the Child Tax Credit. This times conception with April or May of the previous year. 

When it comes to health insurance, if you have the option, consider choosing a lower-deductible and higher-premium health insurance plan, like PPO coverage. Becoming pregnant is not a qualifying life event that enables you to change coverage, so you’ll want to plan ahead during open enrollment. 

In exchange for higher ongoing premiums, opting for the plan with a lower deductible can get you insurance coverage that kicks in sooner and covers more of your total cost. All health insurance is different, but I’ve heard of women with PPO coverage paying a grand total of $600 for ALL of their labor and delivery.

For the love of all that is holy, call to pre-clear labor & delivery costs and confirm that your delivery location is in-network before having a baby. You may have noticed I referred to my in-network, out-of-pocket max several times in this blog post. The in-network max is much less than the out-of-network max.

If for some reason I’d deliver at an out-of-network hospital, my insurance’s out-of-pocket max would be $40,000, not $14,900. Based on my labor and delivery bill of $42,000 (that thankfully my insurance mostly covered) for a rather routine delivery of my first baby, hitting $40,000 in expenses is a layup.

Finally, consider negotiating your medical bills after the fact if you’re facing financial hardship. There are plenty of scripts to help you do this. I’ve linked a good one here.👈

I feel like the doctor who smokes when I write about my financial blunders. But, it’s fun to laugh at the situation, and I want you to realize that nobody makes all of the right money moves in the messy real world, even a financial planner. Don’t be too hard on yourself.

Nonetheless, I’m excited to meet my expensive bundle of joy. Worth every penny. 😊

Related Post: 8 Key Financial Steps for Baby’s 1st Year


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments may be appropriate for you, consult with your financial advisor.


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