Buying Health Insurance for Your Surrogate

by William Houghton

Some U.S. health insurance policies cover fertility treatments, including one or more IVF cycles. But no insurance will cover the cost of your surrogate’s fertility treatments or compensation. Once pregnant, the surrogate’s prenatal care is paid from a separate health insurance policy that parents will buy for the surrogate.


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Will My Insurance Cover a Surrogacy Journey?

Currently only 15 states have laws requiring insurance companies to cover infertility treatments — even though about 12 percent of U.S. women of childbearing age have received medical treatment for infertility. Of these states, most do not include a basic IVF procedures in their required coverage. No state requires surrogacy procedures to be covered, and only a few insurers will do this voluntarily.

Here is what is and isn’t generally covered by insurance:

  • Insurance companies will not cover the cost of an embryo transfer to a surrogate, or the stimulation and fertility treatments that go along with that.

  • Insurance companies will not cover the cost of donated eggs. Some private health plans may offer female workers a benefit allowing them to retrieve and freeze eggs.

  • Rarely do insurance providers cover in vitro fertilization procedures. Some will offer one IVF procedure as part of an infertility benefit, but this is usually quite limited.

  • Some private health insurance companies WILL cover the cost of artificial insemination IF the surrogate is using a combination of her own eggs with the genetic father’s sperm.

  • Certain insurance companies include a specific clause in their plans that excludes medical coverage for surrogate pregnancies. However, if an insurance company does not specifically state that this type of pregnancy will not be covered, they must by law cover the costs that they normally would if it were a traditional pregnancy.

  • In most cases, when dealing with a surrogate pregnancy, the parents of the child will cover the costs not taken care of by insurance.

  • It is common for many health insurance companies to cover the cost of the pregnancy, but covering the fertility treatments will be the responsibility of the surrogate or the donor.

  • In the case of a surrogacy pregnancy, some health insurance companies will give you the option of adding a temporary policy to your plan to cover the costs of the surrogate, the fertility treatments, as well as the labor and delivery.

  • A detailed breakdown of all surrogacy costs are available in SENSIBLE’s Surrogacy Cost Guide.


Do You Need Medical Insurance for Your U.S. Surrogate?

Short answer: Yes. You need to ensure your surrogate is fully covered by health insurance that will cover her prenatal care and delivery.

If you come from a country with universal health care or a national medical care system, the United States’ private insurance-based system is confounding and exasperating. But if you intend to pursue surrogacy in the U.S., you’ll need to be very familiar with the U.S. insurance market. Here is what Intended Parents need to know.

It is NOT the case that the surrogate’s own health insurance will provide coverage. In general, only 1 in 10 potential surrogates have insurance that will include maternity care. Most often the surrogate’s insurance will include co-payments and deductibles of $5000 or more, which must be paid before the insurance pays any expenses. In that case, it is probably less expensive to invest in a new insurance policy without a deductible.

Fortunately insurance available through the ObamaCare marketplace (A.K.A. The Affordable Care Act) is required by law to include maternity care, which generally includes surrogacy. These policies cost $600 to $700 per month depending on the terms (co-payments and deductibles will heavily influence the policy premiums).

Unfortunately, ObamaCare insurance must be purchased during an Open Enrollment period in November and early December. After that period, parents must by an insurance policy on the open market. These policies are much more expensive, costing from $1,000 to $1,500 per month.

Will my surrogate’s insurance cover surrogacy?

One of the most daunting drawbacks of surrogacy in the United States is the complexity of providing insurance for your surrogate.

1. In the U.S., only the elderly, low-income individuals and military veterans are eligible for national health care. About 35% of Americans qualify for one of these public plans, according to the U.S. census. None of these groups are likely to qualify to be a surrogate, so your selected surrogate will need private insurance.

2. Private insurance is most often obtained through a person’s employer. Employer-based health plans cover half of all Americans. The rest of Americans either have no insurance (10%) or they buy their own insurance directly from an insurance provider or broker (7%).

3. If your surrogate has insurance, that does not mean that your surrogacy pregnancy is covered. Many insurance policies don’t include coverage for a pregnancy. As surrogacy has become more common, other insurance policies now have specific restrictions to their policies that disallow surrogacy pregnancies.

a. Assume that 90% of cases, your surrogate’s insurance policy will NOT cover a surrogate pregnancy.

b. If your surrogacy pregnancy is allowed by an insurance policy, there may also be steep deductibles or co-payments that you must pay from your pocket before the insurance will begin paying for procedures.

Insurance for the Newborn

The baby, when it is born, is not covered under the surrogate’s medical insurance. From the moment the baby leaves the womb, the Intended Parents become responsible for all medical costs. If the baby is born prematurely or has some other complication, NICU costs reach about $5,000/day in the U.S., and a stay of 1 to 3 weeks is not unusual).

If you are a U.S. resident, you probably have health insurance that can be easily expand to cover a new family member. In this case you are set, and your newborn will be covered in case of any medical complications (co-payments and deductibles notwithstanding).

But for non-U.S. residents, you will need to provide insurance for your newborn through the private insurance market. This can be expensive and complicated. Insurance policies for the newborn can cost up to $25,000 USD.

IMPORTANT: No U.S. insurance policy will cover twins pregnancies, which have high a likelihood of expensive complications both during and after the delivery. Overseas parents should know that they cannot pursue a Twins Pregnancy in the Untied States without risking $100,000 USD in medical payments or more.

If you are lucky enough to have U.S. private insurance, the newborn should be added in the third trimester, well before the expected delivery date (to cover a premature birth or any complications that happen at the time of the birth). If insurance is not available before the baby is born, then some supplemental insurance may be purchased to bridge the gap between the time of the delivery and the time that the insurance coverage takes effect.

What is ObamaCare, and will it provide reliable insurance for my surrogate?

Obamacare (which is actually named the Affordable Care Act) was a law passed in 2010 designed to reduce the number of Americans without insurance. It was a complicated reform, but the biggest component effecting Intended Parents is that the private insurance companies were forced to cover certain medical conditions (including new pregnancies, among others). Also, uninsured people were compelled to buy insurance through an online website during an Open Enrollment period every November.

4. The Affordable Care Act (aka, ACA or ObamaCare) was an attempt to force insurance companies to offer better coverage and to reduce costs by letting the insurance companies compete in an online marketplace. ACA insurance plans are typically much more affordable and offer greater benefits than other plans. Many ACA plans will cover a surrogacy pregnancy.

a. The average ACA plan has a monthly premium of around $500/month for someone in their 20s who doesn’t smoke. How the cost of ACA plans are calculated can be reviewed here.

5. The problem with ACA is that you can only enroll in the insurance program during an ”Open Enrollment” period in November and early December. Once enrolled, the policy will not take effect until January 1.

a. So if you’re surrogate becomes pregnant in July, she cannot enroll in an ACA insurance program until 5 months into the pregnancy, and the policy won’t begin coverage until the 6th month (around Week 28 of a 38-week pregnancy).

b. A few states are now extending the enrollment period into January.

What is the alternative to ObamaCare for surrogate insurance

6. If you want insurance after/before the ACA open enrollment period, you must buy private insurance OUTSIDE of the ACA marketplace. That’s more expensive and more complicated. There are two options:

a. Option 1. You can buy Private Insurance direct from an insurance company (or their broker), which can be expensive. Private Insurnace may cost $1000/month, but also include deductibles and co-payments of thousands of dollars, which you need to pay out-of-pocket.

i. Some companies offer “surrogacy insurance” which specializes in health care for surrogates. These generally range from $15,000 to $24,000 USD for the complete surrogacy journey and recovery (about 12 to 14 months).

ii. Surrogacy insurance is specially designed for surrogacy procedures, and include unusual provisions for details like a change in the surrogate or repeat IVF cycles stimulation protocols that would not apply to other pregnancies.

b. Option 2. You can buy temporary insurance just for those few months until the lower cost ACA plan becomes available. This is often called “Gap Insurance” or “Fill the Gap Insurance”.

i. Gap insurance is not cheap, but it’s paid monthly and you may only need to pay for a few months. You can cancel a Gap insurance policy at any time.

ii. Gap Insurance often has some “enrollment fees” that can add to the total cost. To get a good price, you have to enroll in a Gap Insurance policy BEFORE you are pregnant.

So… What’s the best option for my surrogate’s insurance?

The best solution for you will depend on when your surrogacy pregnancy starts. A lot of couples try to time their surrogacy journey to start between November 1 and January 1 — this is a super busy time for U.S. surrogacy agencies (like April 15 for Tax Accountants!) That’s not always possible, so you should be aware of how the timing of your pregnancy will affect your insurance options (and budget).

To know for sure, you need to do some math…

8. If you surrogate has her own insurance and it will cover the pregnancy, congratulations! You don’t need to do anything (although you may still have to pay deductibles and co-payments from her policy). But in the likely event that she does NOT have insurance, the path forward depends on your timing…

a. If you become pregnant around November, you are in luck! It’s Open Enrollment time, and you can sign up for an ACA plan right away. You’ll get the best deal on insurance for your surrogate, and the options are pretty clear on the ACA website.

b. If you get pregnant in September, you will need to buy Gap insurance for 3 months until your ACA plan can begin paying your expenses.

c. If you get pregnant in July, you’ll probably need Gap insurance for 6 months (but that doesn’t always make the best financial sense).

d. If you get pregnant in March, your entire pregnancy will conclude before the ACA open enrollment period – so Gap Insurance makes no sense. You should consider a Private Insurance policy. But depending on the deductibles required, that may also be expensive.

In short, the month when your surrogate gets pregnant will strongly influence the total cost of your insurance bill. If you can get pregnant late in the year, you can save a lot of money. The only way to know what makes the best financial sense is to do the math. Fortunately there are consultancies that specialize in this and you can pay one to do the calculation for you.

Here are some hypotheticals to explain the reasoning…

Let’s assume your Gap insurance costs $1,200/month with $1000 in enrollment fees. Also assume your ACA plan would be $500/month (but can only be bought during Open Enrollment in November). Finally, let’s assume that a Private Insurance program is available for $1,000/month for a 12 month term.

a. If you need Gap Insurance for 3 months, that’s $4,600 additional to your surrogacy budget. (That is about $3000 more than the ACA plan, which would cost $1500 for those same 3 months.)

b. If you need to buy that Gap insurance for 6 months, that’s about $8,200 in total. Depending on the plan (the enrollment fees + deductibles), your Gap insurance may start to become as expensive as just buying a Private Insurance policy.

c. If you need Gap insurance for 9 months… well, that’s not really Gap Insurance at all because the policy will have to run the entire duration of your surrogacy journey. It would definitely be cheaper to buy a Private Insurance policy.

But is Gap insurance really needed?

The insurance medical bills and the insurance policy are in the name of the surrogate — she is the one who is pregnant and receiving medical care. So she will be the final arbiter of the insurance decision you make. That said, if your surrogate is willing, some of the Gap insurance expenses may be sidestepped.

10. During the first few months of a pregnancy, the standard clinical procedures are easy to predict – office visits every few weeks, a couple of ultrasounds, a standard blood test, some medications for pregnancy-related side-effects (like heart burn or nausea). These are not expensive and the risk of any major medical complications is very low. So it is reasonable to consider whether insurance in the first trimester is really needed. This is especially true if your insurance has deductibles or co-payments.

a. Total anticipated expenses (without insurance) could be as low as $750 to $1,000 /month. While there are frequent minor aches and pains that require some medication, there are seldom reasons for hospitalization or treatments that would incur major expenses. Miscarriages are relatively common (and heartbreaking), but they don’t generally require hospitalization.

b. If your Gap insurance costs $2,000/month, and has an enrollment fee of $1,500, then it’s easy to see that you can save some money by paying these few medical expenses out of your pocket.

i. Note that some Gap Insurance costs much more if you buy it after the pregnancy is detected, and even more after the first trimester. So you should include the higher policy premium in your calculation when deciding what makes financial sense.

11. During the second trimester the possibility of a serious complication in the pregnancy begins to grow. Risks may be low at first, but by the end of the second trimester there are common complications that would need medical treatments and insurance coverage.

12. In the third trimester, you ABSOLUTELY need the insurance. The delivery cost alone will be between $5,000 and $11,000 for a natural, vaginal delivery without complications (according to Fair Health). Three of 10 deliveries will be by c-section, which is 2,000 to $4,000 additional. That is the best-case price for the delivery — when you add in prenatal, delivery-related and post-partum healthcare, and you’re looking at an $9,0000 minimum tab, according to a Thomson Healthcare study for March of Dimes.

a. Complications and premature birth occur in about 1 of 5 IVF pregnancies, and that can increase the cost of your delivery by nearly 1000% (compared to deliveries without complications). Premature births can result in several days or weeks in an NICU, at a cost of about $5,000/day. It’s easy to see the colossal risk of not having insurance at this important point of the journey.

A final note about insurance and your surrogate

13. Regardless of what seems to make best financial sense for you, it’s important to discuss insurance options with your surrogate. Your surrogate will be the person purchasing the insurance, and all medical expenses will come in her name. So she has as large (if not larger) stake in the decision about insurance coverage as yourself.

Also Note: The surrogate’s insurance does not cover the baby once it leaves the womb. (The newborn should be covered by the Parent’s own insurance.) For non-U.S. parents, get ready to research additional private insurance for your newborn, which can be much more expensive than for the surrogate.

About the authors

  • Bill-Houghton
  • Author: William Houghton

    Bill Houghton is the founder of Sensible Surrogacy, author of the Sensible Surrogacy Guide, 2x surrogacy dad, and a dedicated advocate for secure, legal and ethical Gestational Surrogacy. Read Bill's Biography

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