A public interest law firm in Wisconsin is working to eliminate a Medicaid "birth tax” in counties across the state.
ABC for Health specializes in health care access issues for low-income clients.
Bobby Peterson, executive director and public interest attorney at the firm, said Wisconsin’s Birth Cost Recovery policy requires unmarried women on Medicaid to identify absent fathers, who are then pursued for delivery and birth costs.
"We've seen it really break up and destroy families that were trying to get together, because suddenly there's this huge amount of birth tax on the family," Peterson explained. "They have to pay back these Medicaid expenses."
Peterson said the firm has helped eliminate the policy in Milwaukee, Racine and Dane counties, slashing nearly $77 million in birth tax judgments against families.
According to the Wisconsin Department of Children and Families, unmarried mothers enrolled in BadgerCare who are not referred to the child support program do not have to repay birth costs.
Peterson noted the policy remains active in more than 60 counties and some are more aggressive than others in pursuing collections.
"People confuse this birth tax issue as child support. No, it's not," Peterson argued. "It's a separate issue. It's handled by the child support office but all they're doing is trying to sue you to get you to repay the birth expenses. And then they keep part of it, which we call the 'county bounty.'"
The policy has been long debated in Wisconsin, with supporters arguing it promotes responsibility. Critics believe it harms low-income families, discourages paternity establishment and disproportionately affects Black families. Wisconsin is only one of two states still enforcing the law.
