What Intended Parents Need to Know About Insurance for Surrogacy

It’s my most favorite time of year! Do you think I’m talking about cooler temperatures? Falling leaves? Pumpkin spice everything? Heck no, I’m talking about health insurance! I understand that I am unique (and strange!) in my love of all things insurance and fully acknowledge that for most it brings a high level of terror (and confusion!) to intended parents (IPs) (and gestational carriers (GCs), alike!). One of the most frequent questions we see is: Does my gestational carrier’s insurance cover pregnancy when acting as a surrogate? The biggest follow-up question? What do we do if it doesn’t?

First, let’s define some terms:

Premium – Payments made to an insurance provider to purchase and maintain coverage. The payments are due at certain times, normally the first of every month.

Deductible – The amount paid for healthcare services before the health insurer pays. Deductibles are based on the benefit period (typically a year at a time).

Coinsurance – A certain percent the insured must pay each benefit period after the insured has paid their deductible. This payment is for covered services only.

Out-of-Pocket Maximum – Cost the insured must pay. Out-of-pocket costs vary by plan and each plan has a maximum out of pocket (MOOP) cost. Out-of-pocket costs are per benefit year, most common to be a calendar year.

When should you start talking about insurance?

Early and often!!! If you are using an agency, they should have at least basic information on your GC’s policy and a reasonable level of thought on whether the policy will cover. Some policies are known right off to not cover at all. Others might not be so clear cut and a professional review is necessary. Companies such as ART Risk Insurance Solutions are a great resource for this. For a reasonably low cost they will conduct a professional review to determine if a policy will cover. I’m going to put this right out there: insurance coverage can and should be part of the matching process! Our agency conducts a full professional review *before* matching so you should know what you are stepping into (as long as nothing changes!). While it’s not fun to think about the nuts and bolts of insurance during the “get to know you” phase of things, it is vitally important that the conversation starts right away.

What about exchange policies?

What if you need a policy for your gestational carrier through the open enrollment exchange (Interchangeably called an ACA policy or an ObamaCare policy)? All policies are not created equally! Many policies available through the exchange also exclude coverage if a woman is acting as a gestational carrier and several have a lien against the gestational carrier’s compensation (if your gestational carrier is acting altruistically or taking low compensation policies with a lien may be great options, though!).

Unless your gestational carrier experiences a qualifying life event (birth, marriage, move from enrollment area, etc…) you generally only have the window of open enrollment, which is very small. [A few lucky states, Maine, Maryland, New Jersey, Rhode island, Vermont, New York and Connecticut, notably, consider pregnancy a qualifying life event which is a great thing for GCs!] Open enrollment begins on November 1, 2024 and ends in most states on January 15, 2025. A few small caveats to this: If you enroll between November 1 and December 15, 2024, coverage will be effective January 1, 2025. If enrolment takes place between December 16, 2024 and January 15, 2025 coverage will be effective February 1, 2025.

The bad news is that the insurance companies aren’t required to release their evidence of coverage booklets until November 1, which is the same day the exchanges open. The even more frustrating news is that they aren’t required to finalize which doctors and hospitals are considered in network until January 1, 15 days after the exchange has already closed in most states!

The good news is that the professionals aren’t seeing a trend toward restriction in coverages in most states at the moment (California, I’m looking at you as a potential problem child here – but Nevada? You’re doing great, so keep up the good work!)

Are there other options?

There are, but they aren’t all necessarily as reasonable in cost and if the pregnancy is with twins, they can be downright scary. There is a Lloyds of London policy available that for a singleton pregnancy has a $10,000 premium and requires $19,000 in up front funding to a self-funded retention (think of it like a fancy legal term for pre-paying the out-of-pocket maximum). That means a $29,000 up front investment, although there is a chance that if the medical bills come in lower than the $19,000, the intended parents could have some of that money returned to them. Bear in mind that if your surrogacy journey crosses two insurance years, the Lloyds of London plan could end up being very close to equal in cost to paying the out-of-pocket maximum and premiums on an exchange plan!

And all of this doesn’t even touch on life insurance or short-term disability! Do you want to talk insurance? We have answers (or at least can point you to the right professionals who definitely have the answers!) Set up a free consult today and let us talk about how we can help make your surrogacy journey a little smoother.