State News

Proposal to roll back tax on unmarried pregnant women creates controversy

ABC for Health Attorney Bobby Peterson testified against the birth tax claiming supporters who will vote on a bill to repeal the tax have conflicts of interest.

Image By: Katie Scheidt

Monday at the Capitol the Legislative Council on Child Support Placement discussed a proposal to repeal a bill requiring unmarried pregnant women who are insured under BadgerCare to pay a birth cost recovery tax.

Birth cost recovery tax, also known as the “birth tax,” affects unmarried parents who seek Medicaid support and prenatal care. Unmarried women living in poverty who apply for BadgerCare Plus are forced to fill out a birth tax form, which inquires about the “absent father” in order to charge them. 

Wisconsin yields about 200,000 births a year to unmarried pregnant women, according to data from the Department of Children and Families, which require enforcement of the birth tax. 

Child support requirements are based on the low-income payer table, which uses percentage guidelines to determine how much the parents have to contribute based on their income. Using this data, the birth tax enforces a rate of about 5 percent of the father’s income. Wisconsin is one of few states that has this policy. 

Bobby Peterson, public interest attorney at ABC for Health, testified for the repeal of this tax during the council meeting. He believes the birth tax is an unnecessary wedge and barrier for couples simply because they are not married, which specifically targets low income and minority families.  

“No one is saying that we should not identify parents and that parents should not be responsible for their children,” Peterson said. “We are just saying, why make them repay these birth expenses and go through these hoops? If they were married, they wouldn’t have to pay it.” 

However, the bill has many people who do not support its passing, instead wanting to see the tax remain as is.

Jim Sullivan, former Democratic senator and current director of Milwaukee County Child Support Services, is opposed because he believes the tax establishes financial and medical support to the child of the unmarried parents and ensures that the parents are primarily responsible for the child before other taxpayers are. 

In a letter to ABC for Health, Sullivan voiced concern about the assumptions implied when groups support rolling back the bill.  

“Even more unfortunate, the good intentions that ABC for Health or other altruistically motivated individuals may have, ultimately results in the argument that this particular group of fathers is incapable, that responsibility is too much for them,” Sullivan wrote.

However, none of the money recovered is used to support the families and children who are paying the birth tax. Instead, the money goes to child support agencies. Peterson claimed these agencies take 15 percent of everything collected, and about 30 percent of any other identifiable medical liabilities. 

Because of this incentive, Peterson suggested those agencies — who are affiliated with the council voting on the bill — oppose the motion to repeal the birth tax because of vested interests.

“It's a big chunk of change for the county agencies, and it's not serving the public policy purposes saying ‘let's make sure pregnant women get services right away,’” Peterson said in reference to the delayed care unmarried pregnant women who want to avoid the tax experience.

This bill is still in its preliminary stages and must be passed by the Legislative Council on Child Support Placement in order to be sent to the assembly floor. If it passes the floor, it will be signed into law by Gov. Tony Evers. 

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