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August 01, 2020 ART: Law & Practice

Financial Planning for a Gestational Surrogacy Process: Possible Ways to Save Money and Risks

Dean Hutchison and Natalie Kanellis

There are many considerations when intended parents embark on assisted reproduction and gestational surrogacy. One of the biggest considerations is the financial impact. Each step of the complex surrogacy process will bring in choices that can save and/or add costs to their overall budget. Sometimes, the choice that appears to save the intended parents money in the short term may add greater costs in the future. This article will attempt to give an overview on the different cost categories of a gestational surrogacy and the potential for cost-saving measures.

Full-Service Agency vs. Matching Agency vs. No Agency

The first choice intended parents will make is how they will find a gestational carrier. The choice is usually between using a surrogacy agency/program versus finding a gestational carrier independently. For those who choose the agency route, they will also have to filter through the type of agency/program they want to work with. Some agencies/programs will provide full services including finding and screening carrier candidates coupled with full coordination of the surrogacy process, while others will just assist in finding and matching the intended parent[s] with a gestational carrier. Thus, intended parents must be careful when comparing the fees charged by the agencies/programs as each program will provide a different level of service, and some programs will require the intended parents to hire various third parties to assist in the screening and other processes throughout the surrogacy journey. The costs associated with the different programs/agencies will vary greatly, with some fees as low as $10,000 to as high as $40,000 depending on the services provided and the fixed nature of the program. Intended parents should ask the surrogacy program/agency about the financial implications in different scenarios such as a match break or a miscarriage as these instances can substantially add to the overall budget. It is best to have a full understanding of the cost ramifications of the various scenarios that can play out in a gestational surrogacy process.

If, instead, the intended parents choose to try and save costs and independently find a gestational surrogacy on their own, they must understand the risks of not including the third parties in the process. While the savings may seem too great to pass up, the lack of independent screening and coordination of the surrogacy can lead to greater costs in the future. Many intended parents do not grasp all the complexities that go into a proper match and think just because they find someone who is willing and able to act as a gestational carrier that they are fine. They do not understand the importance of considering the legal implications of the carrier’s state, the impact of insurance, the potential need for social work support, and the time it will take to coordinate the whole process. It is one area in which the cost savings will almost never be justified.

Egg Donor Costs/Savings

The sourcing of an egg donor, if needed, is another cost consideration for intended parents. Again, the overall costs will depend on where and how the egg donor is sourced. If the intended parents want a fresh cycle (an egg donor goes through an egg retrieval at an IVF clinic specifically for the intended parents) and are not working with a family member or friend, they will need to engage the services of an egg donation program/agency. The program fees usually range between $5,000 and $10,000. Intended parents must also account for the egg donor’s fees (approximately $5,000–$15,000, but they can exceed $20,000) and their expenses for the egg donation process (this will include travel, accommodation, and other expenses). Intended parents should budget somewhere between $15,000 and $27,000 for the egg donation process.

Intended parents can potentially save some of these costs by working with a donor sourced through their IVF clinic or working with an egg bank program. If their chosen IVF clinic has an egg donor program, usually there are no added donor agency costs and the donors often live close to the clinic so intended parents will save money on expenses. Intended parents could expect to save up to $10,000 working with a clinic donor. Egg bank programs have also become more popular in the field recently and offer potential savings. An egg bank is a program where egg donors donate their eggs to the program rather than directly to the intended parents. Intended parents, in turn, purchase a set number of eggs (usually six to nine) to use for embryo creation. Similarly, the costs savings come from not having to pay a donor agency fee and minimized donor expenses (and a lower donor fee). While there are potential cost savings with the use of an egg bank, there are some negatives and possible risks to go with this route. First, there is a greater likelihood of a limited number of available embryos to use for the surrogacy process. Thus, any cost savings may be mitigated by the fact that another round of IVF and donation services may be needed. This is a bigger impact when the intended parents wish to have more than one child through future surrogacies.

Legal Fees

The intended parents will also be responsible for legal fees at different stages of the process. Attorneys are needed to draft and negotiate the contracts with the gestational carrier and egg donor and will be needed to establish the intended parents’ parentage rights in the state of delivery. Intended parents should budget somewhere in the $8,000–$12,000 range for the combined legal fees for the different contracts and court orders. Sometimes intended parents think they can save money by not using counsel for contracts and simply downloading form contracts online. Obviously, although this may look like a costs savings for intended parents, there is a giant risk for all the parties involved with not involving attorneys in the contract process for a small cost savings.

Medical Costs

Intended parents also need to budget for the medical costs associated with the IVF process. Costs associated with IVF will vary greatly depending on the clinic the intended parents chose and the programs available at the IVF clinic. IVF fees can range from $20,000 to $60,000 depending on programs and testing the intended parents choose. The higher-cost IVF programs tend to include a package of testing and increased number of transfers or unlimited IVF so, while they appear to be far more expansive, they may be providing greater protection to the intended parents. The unlimited programs protect the intended parents from catastrophic costs associated with miscarriages or the potential of running out of embryos and having to pay the full costs for another egg retrieval, embryo creation, and transfer cycles. The extra $10,000–$15,000 in costs could end up saving intended parents $25,000–$40,000 in those scenarios.

Insurance/Pregnancy Medical Expenses

Intended parents will also need to factor the costs of insurance, medical expenses associated with the pregnancy, and medical expenses for the baby or babies to be born. This is yet another set of costs that will vary tremendously, with total exposure for maternity insurance and medical costs being as low as $5,000 to as high as $30,000 depending on the carrier’s insurance circumstances. The carrier’s health insurance and medical costs will be the largest part of the insurance equation and be highly dependent on whether her insurance will provide coverage to an insured acting as a gestational carrier. Should her insurance provide coverage, intended parents will be responsible for the carrier’s co-pays and deductibles and any noncovered procedures. Also, carriers with insurance often have a higher base fee to compensate for premium costs and for assisting with insurance dealings. A backup insurance policy can also be purchased to protect intended parents in case of her insurance denying coverage or changing during the pregnancy. If the carrier is not insured, there are insurance products that can be purchased for the surrogacy process that usually act more like catastrophic plans. Sometimes, private health insurance can be purchased for the carrier during the open-enrollment period.

Intended parents will also likely be required to purchase other insurance products pursuant to their agreement with their gestational carrier. These are usually relatively low-cost items like complications insurance (insurance that protects carriers and egg donors for any complications that result from the IVF process), life insurance for the gestational carrier, long-/short-term insurance, and bed rest insurance. While adding to the overall cost of the journey, these items will offer protections to the intended parents from tens of thousands of dollars in potential liability.

One medical/insurance cost that many intended parents fail to consider is the cost at the hospital for the child[ren]. Intended parents should thoroughly review their own insurance policies to make sure they will have adequate coverage for the newborn baby in the state and hospital where the carrier will deliver, as the gestational carrier is usually residing in a different state than the intended parents.

Carrier Costs and Expenses

The last major piece the intended parents will need to budget for are the actual fees of the gestational carrier. The carrier’s fees range now somewhere between $25,000 and $70,000. These fees will vary based on where the carrier resides, her insurance situation, and the number of surrogacies she has completed, among other variables. The carrier will also have expenses that will be covered by the intended parents, including travel costs and monthly miscellaneous and transfer costs. Carrier expenses usually average about $10,000 to $15,000 for the duration of the IVF process and pregnancy.

Miscellaneous Costs

After totaling their estimate of the expected overall cost, the intended parents should expect a 10–20% increase in overall costs due to miscellaneous expenses and contingencies that can occur over the course the surrogacy. One of these expenses is the intended parents’ travel to and from the carrier’s home state during the pregnancy and for the delivery. These costs will vary greatly based upon the intended parents’ own travel preferences and can be based on the health of the child[ren] at birth. Should a child have a longer stay in the hospital, intended parents’ length of stay will increase. Intended parents should also plan for the potential contingencies found in their contract. Carriers will have set contingency-related costs in their agreement with their intended parents should certain issues occur in their surrogacy, such as C-sections, loss of reproductive organs, and invasive procedures. Even a simple failed embryo transfer will bring on additional costs upwards of $6,000–$8,000 for the next embryo transfer.

Possible Cost Savings

As you can see from above, the costs of gestational surrogacy can range from $100,0000 to $200,000. This cost is a barrier to many who wish to use gestational surrogacy. While there is no one big fix to this, there are many organizations aimed at assisting with the costs and helping more people achieve their dream of parentage. One example is the Men Having Babies charitable organization that has an income-based program, GPAP, to assist intended parents with the costs of gestational surrogacy. Men Having Babies teamed up with many providers in the industry to offer reduced and sometime zero-cost medical services, surrogacy matching and coordination services, egg donor services, insurance, and legal work. Other programs, such as LiveStrong, Babyquest, Expect Miracles, and AGC scholarships, offer grants of varying amounts to couples struggling with infertility. Intended parents should investigate all these different charitable organizations and others to see what grants may be available to them.

There have also been some new fertility benefits companies that have entered the arena, providing a network of lower-cost IVF services. Companies like Carrot and Progyny have been marketing their benefits programs to employers around the country so that employees can utilize fertility benefits outside their usual health insurance coverage and at lower costs.

Intended parents should also speak with their tax professionals regarding possible deductions related to their surrogacy process. There are positive IRS written decisions permitting intended parents to take deductions for medical expenses and other expenses incurred during the process.

Finally, intended parents should investigate their own company’s HR policies. Recently, companies have increasingly begun to provide additional benefits for IVF and surrogacy to attract employees. Some companies have benefits as great as $60,000 for surrogacy-related costs and insurance policies that allow the gestational carrier to be fully covered by the intended parents’ insurer. Intended parents should speak with their HR departments to inquire about all these possibilities.

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Dean Hutchison is a graduate of Suffolk University Law School. He has practiced in the ART field for the last 16 years and is a vice president at Circle Surrogacy and the current chair of the ABA Family Law Section ART Law Committee.

Natalie Kanellis is a graduate of the University of Iowa College of Law. She practiced in commercial litigation and appellate work in New York City and Boston prior to joining Circle Surrogacy.