Scott in comments yesterday raised an interesting scenario that has been marinating in the back of my mind for a while now:
My son and wife had their daughter on 31 Dec by inducement a year ago (date chosen for purely financial reasons as the scheduled inducement was for 3 Jan until they realized that deductibles, etc reset at 1 Jan.
New Years’ Day is the 2nd least likely birthday after Christmas.
I am curious if researchers have been able to leverage the January 1 reset day as a means of evaluating the effectiveness of the Earned Income Tax Credit and other child related tax code features?
My now 11 year old daughter is a mid-afternoon New Years Day baby. She was due on the 28th or the 29th. She decided to take her time. We had a low deductible plan that rolled over into a high deductible plan at 12:01 AM on January 1st. She was ready to greet us well after that threshold was crossed. Between the deductible resetting and our inability to claim her as a dependent and get child tax credits for a December birth, she cost us several thousand dollars in a year where we knew that we were going to be stretched thin.
The deductible hit was immediate. I think we got the bill three weeks after birth. We were able to claim her as a tax deduction fourteen months after birth instead of two months after birth if she had been born eighteen hours earlier.
I am curious if there is research that looks at long term outcomes using the January 1st birth eligibility discontinuity as there is a huge swing in very early life parental financial resources available. Kids who were born on December 30th or 31st are fundamentally similar to kids born on January 1 or January 2 except for the presence of a significant resource infusion due to a policy cut-off. I would expect that we should see the late December kids to have better outcomes than the early January kids because their parents will have significantly more financial resources in the first three to six months of the baby’s life. More resources might translate into less parental stress which could lead to better bonding and security for the infant. Another pathway could be simply that the baby’s diaper gets changed more often as there is more cash to buy diapers and therefore the risks of abuse are lowered. I’m speculating here but I am truly curious.
Ken
Sorry I can’t help with your questions, but here’s another. Say your wife had gone into labor on the 31st, but the daughter didn’t make her appearance until the 1st. I would expect you’re still out of luck on the tax deduction, but what about the insurance?
Does it come down to the billing system? That is, whether the hospital treats it as one procedure dated the 31st, one procedure dated the 1st, or multiple procedures with different dates.
JPL
@Ken: That’s an interesting question, and I wonder whether he’s get hit with both deductibles..
The Dangerman
December 30th birthday here (I said so about 10 days ago in a post that briefly mused about sharing a Birthday with Tiger Woods and LeBron James); I was told that I was induced for tax purposes, but I don’t think my Parents were serious about the deduction being the reason. I think the MD said I was ready to come out and my Mother was tired of caring me around; the tax benefit was icing on that cake. After my Mother passed, I went through her (and their) stuff with a fine tooth comb and found a receipt from my Birth Hospital for about a week after I was born. I assume it was for me (I cost my Folks about $150 as I recall; fairly expensive in 1961 dollars).
As for outcomes, there must be some nonzero benefit to the early life cash flows. More is always better than less. Then outcomes go the other way as a Birthday between Christmas and New Years kinda blows. One can try to make it a big day, but no way it isn’t overshadowed by Christmas (duh) or New Years (especially for a Family into sports; a day with nothing but great Football from early morning to late at night was a good day). Worse, the day is always one of the shortest and coldest of the year, so doing something is always constrained in some fashion (this is incrementally worse if you grew up near Pasadena, where even many decades ago the thought of going out so close to New Years wasn’t really done).
Rusty
On the flip side, I have seen articles that top soccer players are much more likely to have been born in the first half of the year. The reason is the January 1st cut off for each age group. Being almost a year older has advantages, you get more notice etc. I do find it depressing that our disfunctional healthcare system even penalizes you by birth date.
chopper
my daughter was born new years’ day. then again it was a natural birth so she came when she wanted to.
chopper
also, my daughter is now 11 also. tho mid-morning, not mid-afternoon.
Argiope
It’s not all about the cash, but about the outcomes. In order to have more Dec 31 babies, we do more inductions, because the insurance hit and tax deductions are well known in the maternity care biz (and by families). More induced than spontaneous labors end in cesareans, for first-time moms. Babies born by cesarean have higher risks to develop childhood asthma and allergies….so how many office visit co-pays will it take before things even out? Cesareans should be avoided unless necessary because of their long-term sequelae, which we rarely hear about. 1 in 5 women experiencing a cesarean birth develop long term pain from adhesions (scars). So this is a case where perverse incentives can make long-term health costs higher.
ETA I’d love to see more cost analysis of the long-term cost consequences of cesarean birth, since we seem very focused on the immediate term (yet are still insufficiently motivated, as a nation, to prevent unnecessary ones.)
dr. bloor
This is uncharacteristically shodding planning on your part, Anderson.
Brad F
David
I remember in 2010 when the estate tax was temporarily repealed there was talk of self-prolonging survival 2009 into 2010 of those who were acutely ill. Different policy and impacts, but one could speculate the funds saved to families of the Jan 1 survivors (granted, to a select cohort of earners) may have produced more wealth downstream. I am almost certain papers looked at this in some manner.
Brad
dr. bloor
@Ken: It’ll be multiple procedures on multiple dates (or should, anyways). Anything related to the admission itself will likely be tagged as 12/31. Post-delivery care will be 1/1 and later. Anything in between will be at the mercy of whoever is doing the charting and the billing clerk.
Nicole
This is a really interesting post. I had not thought about it in the sense of long-term outcomes as a result of finances during the first six months of life, but it’s something worth studying.
And it reminds me of my uncle telling us the story of the first tax year after he got married- my grandfather, his father-in-law, called him to tell him that since my uncle married his daughter in August, which was past the halfway point of the year, my grandfather was still going to claim her on his taxes as a dependent. My uncle said it absolutely killed with with the IRS that year, but he was too intimidated by his new father-in-law to say anything.
Konokwee
In terms of reducing the incentive to induce by December 31st to get the tax credit, a simple solution would be to prorate the child tax deduction to the day of birth. My very rough back of the envelope calculation shows about $10 billion in tax savings per annum for this change, as well as better health outcomes. The deductible reset still would remain, however.
narya
My sister would have been 60 on 12/31–and, because I (as the older-by-17-months child) was Caesarean, and VBACs weren’t so common then, so was she. My parents explicitly picked that date for tax purposes.
David Anderson
We were trying everything to speed things along… and that process was at times awkward and enjoyable
EmbraceYourInnerCrone
@Argiope: But how many of those babies that were induced were induced for reasons that were more likely to end up in a C-section? How many of those babies were induced for health reasons of the baby or the mother? In the US more mothers are older, and in poorer health to start with, so how much does that have to do with the baby’s health issues. If the induction is for reasons like a large baby (sometimes a result of gestational diabetes) how can you be sure that the underlying reason for the induction and C-section is not why the baby is less healthy, Not the “interventions” themselves. Personally I would have preferred a C-Section, I had a baby in fetal distress with late decels who was delivered vaginally. She had to be resuscitated at birth because she wasn’t breathing, she was big and I have permanent pelvic floor damage and stress incontinence as a result.
SO I guess a C-section was “unnecessary” in my case but I would have liked the choice. Who gets to decide which C-sections were unnecessary? What if a person does not want to deliver vaginally due to previous trauma, does a woman’s choice mean nothing in this case.
JustRuss
I was talking to a buddy of mine recently, and he mentioned that his father was the first baby born in Seattle in 1940. His grandfather was pictured in the newspaper, smoking a cigar in the hospital waiting room. I started laughing, imagining that playing out today.
Argiope
@EmbraceYourInnerCrone: Sorry, I should have specified: these are elective inductions of healthy moms and babies I’m referring to–no medical reason for the induction. If there’s a medical reason, induction is a great idea, whether or not it leads to cesarean.
ETA: It’s loooking like the reason for the later issues with asthma and allergies has to do with the microbiome the baby is exposed to at the time of birth: mom’s vagina vs the OR. Getting colonized with OR microbes makes it more likely the infant will develop a hypersensitive immune system and react to stuff it shouldn’t.
EmbraceYourInnerCrone
@Argiope: But doesn’t the baby get colonized by the family microbiome just by exposure to their parents/skin to skin at delivery/breastfeeding etc?
Isn’t some of the asthma/allergies possibly genetic and also dependent on what other things the kid is exposed to (pets, being allowed to play in the dirt/grass/etc)
I’m just curious about the controls used in this sort of study and if they controlled for those confounding elements.
otmar
From an Austrian point of view, this is an utterly ridiculous discussion. There are only two factors in play here:
In both cases, it’s more of a question of delaying instead of accelerating birth.
EmbraceYourInnerCrone
@Argiope: For example:
https://www.jacionline.org/article/S0091-6749(03)01541-0/fulltext
“Results: Among children whose mothers were allergic, cesarean section was associated with a 7-fold increased risk of parentally perceived reactions to egg, fish, or nuts (odds ratio, 7.0; CI, 1.8-28; P = .005) and a 4-fold increased risk of confirmed egg allergy (odds ratio, 4.1; CI, 0.9-19; P = .08) in a logistic regression analysis, adjusting for pregnancy complications, birth weight, gestational length, and socioeconomic factors. Among children whose mothers were not allergic, the association was much weaker and not significant. Maternal or infant use of antibiotics was not associated with an increased risk of food allergy. Conclusion: The results indicate that in predisposed children cesarean section might increase the risk of development of food allergy, which supports the theory that factors interfering with the colonization process might play a role in the development of food allergy. (J Allergy Clin Immunol 2003;112:420-6.)
Argiope
@EmbraceYourInnerCrone: There’s no doubt that allergies and asthma are multi-factorial in origin, and probably mediated via the epigenome, so there’s a genetic piece plus an environmental exposure piece. Nevertheless, there’s a persistent association in the literature for cesarean as a risk factor. While association isn’t causation, there’s a plausible mechanism for that initial colonization being a factor in immune system programming. And, interestingly, babies seem to get that first colonization from whatever they come in contact with once the amniotic sac is breached–so babies who are born through an abdominal incision in an OR get their initial contact (and microbiome programming) with OR microbes (first skin contact = OR gloved hands) and babies born vaginally have microbes that look more like mom’s.
Let’s see if I can manage a link.
ETA: apparently no on the linky. Second attempt: https://www.nature.com/articles/d41586-019-02807-x