Surrogate Insurance... What's the Skinny?

One of the big issues that arises in surrogacy is insurance.  What insurance covers surrogacy? How do I know if my policy will cover the expenses?  What do I do if I don't have insurance or I have surrogate unfriendly insurance? What is open enrollment?  What if we want to transfer now... is there any way around this insurance issue?  All of these questions we get asked on a regular basis. So here is the low down on insurance as it relates to surrogacy.

Please note:  We are an agency and not an insurance broker. You should always have your policy reviewed by a third party specialist (for your piece of mind and also to be compliant ASRM guidelines). 


Today is February 23rd and is inherently a slow time in surrogacy.  Here's why: insurance. Insurance companies open their doors for all new applicants in October/November each year.  At that time, they process your paperwork and grant or deny you a policy.  Coverage then begins January of the following year.  This period is known as open enrollment. Open enrollment, depending on the insurance company, ends around the end of January or mid February.  After that cut off date, their doors are closed and  no one without a qualifying life event is buying insurance until the following open enrollment period. As of two weeks ago, open enrollment for 2016 is officially closed

Qualifying life event... what's that?  Surely becoming pregnant would fit into that category!  Unfortunately, no, pregnancy is not a magic key that opens the heavily guarded doors of insurance land.  Giving birth, yes.  Changing jobs, yes.  Getting married, yes.  Getting pregnant, NO. So, if there is no insurance policies available, what are my options? 

There are other options but they are either scarce or hugely expensive.  The following are a list of options until open enrollment begins again in the Fall:

Cash only:  You can choose to go without insurance and pay all costs directly to the hospital or birthing center. Most have a "cash" option that gives significant discounts for patients who pay cash instead of using insurance.  An average vaginal delivery with no complications is $18,000 and a c-section is about $28,000 as noted by The Times in their article detailing the U.S. as one of the most costly countries to birth a child. To add this cost onto the cost of a surrogacy journey can easily throw you into six figures for the complete process. Also note that with insurance or without, the patient is the surrogate so all medical bills will be in her name.  Some hospitals and doctors will allow your to add the IPs as the "financially responsible party" to the paperwork, but not all.  In the end, it can be a wildly expensive process if something catastrophic happens and the bills reach $60k and beyond.

Surrogate with Surrogate Friendly Insurance: These beautiful snow tigers are known to exist but are rare and dying out quickly.  As more and more insurance companies become surrogate exclusionary, finding a surrogate with insurance to cover the medical costs is a little like winning the lottery.  Not only can you save money as IPs during the process, the surrogate doesn't have to change doctors and you can match and transfer at any time throughout the year. Surrogate friendly policies should still be reviewed by an independent third party to verify the parameters and exclusions the policy may contain. 

Liens: While some insurance companies may not be exactly "surrogate friendly", they are not exactly "surrogate unfriendly" either.  Some health insurance carriers allow for liens; a particular percentage of the surrogate compensation amount to cover the cost of the pregnancy and delivery.  For example, in the state of California, Kaiser is not known as being "surrogate friendly".  However, they do not leave you without options.  Kaiser asses up to 49.99% of the surrogate's compensation amount to be applied to the medical costs.  In this case, if the surrogate was being compensated $30,000, Kaiser would reserve the right to bill up to approximately $15,000 for the medical bills.  Should the bills only total $9500, then they would only charge $9500.  Should the bills total $32,000, Kaiser would still only bill the maximum amount, which in this case is $15,000.  While this is not the cheapest option, there are choices for certain IPs and Surrogates with varying forms of insurance before open enrollment begins in the Fall.

"Bridge" or "Gap" Insurance: Also known as short term health insurance, these companies exist to fill in coverage for periods of time before open enrollment but when insurance is needed.  These type of policies exist primarily to cover a period where someone may be changing jobs and waiting for insurance to kick in, aging out of a parent's policy or a substitution for COBRA coverage, etc.  These policies often have very high price tags, huge deductibles or both.  That being said, they also offer upwards of 2 million dollars of coverage so should something catastrophic happen, you could financially protect yourself from loosing your home or life savings. These policies are meant to be a temporary solution to a no insurance policy but do have rather large loop holes and deficits in coverage.  These plans also need to be vetted by a neutral third party. Ultimately, if you have the money to spend and  no time to wait, this may be an option to explore. 

In the end, the majority of surrogacy transfers are on hold until open enrollment.  At that time, a policy can be purchased for your surrogate and you can have piece of mind knowing that both your surrogate, as well as your baby and yourself are protected. In the mean time, your agency can be completing a thorough background check, in home visits, psych evaluations, medical screenings and matching.  You can go into legal contracts and start building a friendship with your surrogate.  By the time January rolls around, everything will be completed and you will be ready to transfer and get this journey off and running! 

Note: As an agency we use ART RISK Financial and Insurance Solutions.  They are specific to ART (assisted reproductive technology) and do both underwriting and insurance policy reviews. They are based in southern California and are experts in their field. And no, they didn't even pay us to put this here. We just like them a lot. :D

Brooke Wojdynski