Is ‘birth-cost recovery’ on its way out?

While a bill languishes in the Legislature that would allow local governments do more to go after fathers for reimbursement after Medicaid pays for the birth of their children, the state’s second largest county has sworn off the practice.

And the largest county is considering following suit.

“Birth-cost recovery” is the name given to the practice of billing unwed fathers when the mothers of their children give birth and Medicaid foots the bill. Wisconsin is among states that have actively employed the tactic, collecting $16 million in 2016, even as other states have discontinued it.

SB-350 in the Wisconsin Senate would permit social welfare agencies to extend birth-cost recovery even to families with the parents who are living together. The bill would repeal a 2018 state administrative rule that called it “inappropriate” for child support agencies to try to recover birth costs in cases when the family is “intact.”

Regardless of family structure, critics contend birth-cost recovery is needless punishment for the poor, while supporters argue it can help shore up social safety nets and that as it is practiced it only asks for a fair share from people who can afford it.

Dane County executive Joe Parisi thinks otherwise. Tucked in the 2020 county budget passed in November was an announcement that the county would stop collecting birth-cost recovery funds.

“Too often, institutional barriers to success go unaddressed, and those barriers usually disproportionately impact people living in poverty and people of color,” Parisi said in his budget message. “One of those barriers is the Birth Cost Recovery (BCR) system.  BCR by definition impacts poor people, families, and children by taking money out of the pockets of people who can least afford it. It can serve as a disincentive to receive needed healthcare benefits and creates additional stress and tension in already stressful situations. Eliminating BCR is the right thing to do for families, and I hope others in the state will follow our lead.”

Now it looks like Milwaukee County’s board chair hopes to do just that.

Theo Lipscomb Jr., who represents northwestern portions of the city of Milwaukee and adjacent suburbs to the north, in December introduced a resolution calling on the county’s Child Support Services to report on “the fiscal and racial impacts of discontinuing the practice of Birth Cost Recovery” in the county.

The resolution notes that the board is on record declaring racism as a public health crisis.

The resolution passed the county’s finance committee unanimously on Dec. 12. It goes before the full County Board on Thursday, Dec. 19.