Roosevelt Institute | Cornell University

Financial Nonsense: Why Medicaid Doesn't Fund Abortions

By Laura BrighamPublished October 27, 2016

The Hyde Amendment has barred federal funding from being used for abortion fees for the past 40 years and severely limited low income women's access to pregnancy termination. The financial implications of this are far reaching and costing taxpayers in the long run.

    In January 2016, history was made in an already historical election—Hillary Clinton became the first Democratic candidate to have an explicit call for a complete repeal of the Hyde Amendment when addressing abortion legislation.
The Hyde Amendment has been tacked onto other bills to get through Congress since 1976, a "rider" that has somehow never been challenged by a Democratic president, but rather renewed by Congress each year. The amendment is intended to prevent federal funds from being used for abortions. While this may seem desirable to some on the surface, the implications of the amendment are far from what is intended by the text of the amendment itself. It allows for abortions to be paid for using federal funds, specifically meaning Medicaid, only in cases of rape, incest, or if the life of the mother would be threatened by carrying the baby to term.  Low-income women are pressured to pay for their abortions using out of pocket funds, a difficult situation for many. If these pregnancies go to term, more children enter the world into often unstable and poor homes due to women's inability to pay for an abortion, and this ends up costing taxpayers more in the long run than simply paying the initial pregnancy termination fee.
For women on private insurance, the Hyde Amendment is somewhat irrelevant. But for lower income women on Medicaid, paying for an abortion is a challenge, costing up to 1,500 dollars according to estimates by Planned Parenthood. 17 states use their own state funds to pay for most or all of the cost for abortions that are deemed "medically necessary" and exceed the coverage of the Hyde Amendment. Yet even these still provide a set of restrictive guidelines women have to meet in order to avoid paying out of pocket.
    Just how far are women set back by an abortion financially if they must pay for it on their own, though? For states that offer Medicaid coverage to childless adults who are unmarried (nearly 40%), their income has to be around $16,000 or lower to qualify for medical coverage federally. This means that if these women are paying out of pocket for an abortion, they could potentially spend up to nearly 10% of their yearly income on it. For families of three, Medicaid coverage extends to people making around $28,000 or lower. Considering a large chunk of these resources must be used towards rent, food, and childcare, little discretionary money remains for low income women to pay for unforeseen expenses. Furthermore, low income citizens tend to live more day to day in their financial situation, meaning coming up with a large chunk of money for an abortion could be nearly impossible.
While abortion costs set back low income women significantly, the effect on government funds is debated. Pro-life supporters point out the money the amendment has saved taxpayers over time in pregnancy termination fees. However, although money may have been saved in abortion fees, taxpayer money has been lost elsewhere.
    Economic implications of unwanted pregnancies are even more extreme when looking at the women that cannot afford abortions on their own. Those with a lower socioeconomic status are more likely to experience unwanted pregnancies, and are more likely to become pregnant at a younger age. These women are also less likely to be married, resulting in fewer wage-earners in each household, and less than 1% of teenage mothers complete college by the time they are 27 years old. This all amounts to a cycle of poverty, trapping young women in situations where they are unable to move up in society and frequently trapping their children as well.
Estimates show that around 2 million babies have been born because of the restrictions the Hyde Amendment began placing on federal funding beginning in 1976, a statistic pro-life advocates use as an indicator of the amendment's success. Teenage mothers, who presumably make up a portion of this 2 million, cost the government 9.4 billion dollars in 2010 alone for increased health care and child care costs, incarceration and lost tax revenue. Those tax dollars saved on abortion fees are instead funneled into paying public costs of unwanted births. From a financial standpoint, these costs far outweigh the $1,500 one time payment for an abortion.
What this all amounts to is a system that disadvantages low-income women who find themselves pregnant, especially at young ages when they are less likely to be able to afford an abortion without governmental aid. Covering a relatively cheap procedure fee could save federal funds in the long run, as when children are born to low-income, often teenage mothers, they cost significant amounts of money over their lifetimes. When it comes to the Hyde Amendment, it's not a matter of pro-life or pro-choice but rather the economic implications unwanted pregnancies have for each and every taxpayer. Perhaps this election cycle we should reframe the abortion debate and think with our wallets instead of our morals.