Objective: To assess the short-term economic savings associated with the prevention of unintended pregnancies through California's Medicaid family planning demonstration project.
Data sources: Secondary data from health and social service programs available to pregnant or parenting women at or below 200 percent of the federal poverty level in California in 2002 and data on the quantity and type of contraceptives dispensed to clients of California's 1115 Federal Medicaid demonstration project.
Study design: The cost of providing publicly funded family planning services was compared with an estimate of public savings resulting from the prevention of unintended pregnancies.
Data collection: To estimate costs and participation rates in each health and social service program, we examined published program reports, government budgetary data, analyses conducted by federal and state level program managers, and calculations from national datasets.
Findings: The unintended pregnancies averted by California's family planning demonstration project in 2002 would have incurred $1.1 billion in public expenditures within 2 years and $2.2 billion within 5 years, significantly more than the $403.8 million spent on the project. Each dollar spent generated savings of $2.76 within 2 years and $5.33 within 5 years.
Conclusions: The California 1115 Medicaid family planning demonstration project resulted in significant public cost savings. The cost of the project was substantially less than the public sector health and social service costs which would have occurred in its absence.