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Almost everything you wanted to know about medical insurance for the surrogate

Medical insurance! These two words will intimidate anyone trying to understand insurance in the United States. In general, most Americans, especially those who deal with surrogacy, will express discomfort if you try to decipher it along with them. And obviously we, who are used to the HMOs and health insurance for everyone, can’t understand in depth an ever-changing industry: policies and coverages that are “annual” (which means that things that worked in 2021 will not necessarily be the same in 2022), the coverage that changes according to the insurance companies as well as to where you live (the same company will offer different policies in different places - in the same state!).

And add to the mix a bit of “employer insurance” peppered with expressions like “on the grid” and “off the grid” and you have a recipe for a mess that keeps getting worse.

So yes, there are insurance agencies that specialize in surrogacy and they’ll ensure that your surrogate will be covered one way or another. However, in order for you to have a basic understanding, let’s discuss the common terminology and FAQs:

Insurance terminology:

Premium - payments made to the insurance companies to purchase medical coverage. Usually paid to the insurance company at the beginning of each month.

Deductibles - an amount that you pay for a doctor’s visit/treatment before the insurance pays. The amount varies depending on your policy - sometimes it’s a pre-defined sum (like if you get a $100 doctor’s visit bill and you pay the first $20 of every bill, the insurance only starts paying above this amount, so it will pay for $80 of the bill), and sometimes it’s in percentages (like a $100 bill and the insurance will pay from 10%, you will pay for the first $10, which is 10% of the amount, and the insurance will pay for the remaining 90%).

Co-insurance - the percentage that you have to pay before the insurance starts paying the deductibles. For example, you pay the first $2,000 in a calendar year, and only after that the insurance participates in the costs, according to the plan.

Out Of Pocket Maximum (OOPM) - the total amount that you will have to pay yourself. The amount obviously varies from one plan to another, but every plan has an OOPM, and this amount is annual. This means that the total amount you will have to pay, deductible or co-insurance, will be this amount and not exceed it.

When should you start talking about insurance?

As early as possible. If you hire a surrogacy agency for the process, they will at least need to know in advance whether your surrogate already has suitable medical insurance for surrogacy or whether you’ll have to purchase it for her. Is her insurance from her employer, from her spouse’s employer, or private insurance? And so on, and so forth.

Some surrogates have insurance that we know does not cover medical procedures and surrogacy, so it will be necessary to purchase the appropriate insurance coverage. Some of the insurance policies will be ambiguous and you’ll need to consult with a professional insurance agent.

Some insurance agencies specialize in this, like ART Risk and ArcLight, who will go over the policy with you and check what it covers, what the risks are, and also attach references like conversations they have with the insurance companies.

Insurance costs in the United States increase every year. According to an article by ART Risk, there is an approximate 4% annual increase in ACA (Obamacare) policies. The U.S. national average was $623 per month in 2020, and the OOPM for that year was $815.

What about Obamacare ACA?

Not all policies are equal. Like we said, there are surrogates who have their own insurance, but they definitely don’t cover surrogacy. Some do cover it, but it depends on the amount you pay the surrogate (for example, she’s not covered for up to half of her pay). Some surrogates are covered by their employer, so he will have an influence on insurance decisions.

In such cases, you’ll need to purchase private medical insurance. You’ll be able to purchase a private and expensive insurance policy, or wait and register for Open Enrollment for Obamacare insurance (ACA). Unlike Israel, where you can sign up for any insurance on any day of the year, in the United States you can sign up for Obamacare only during the Open Enrollment period, which is the only time of the year when you can buy the insurance (in most U.S. states this is around November-December, but recently mainly due to COVID-19 additional windows are opening up throughout the year). Another option that will enable purchasing the discounted insurance will be subsequent to a life-changing event of the surrogate (she moved to another area, got married, gave birth, etc.) - but it’s very rare.

The bad news is that the insurance companies aren’t obligated to “expose” their plans before the 1st of November, which is the date when the “race” starts to purchase insurance (the Open Enrollment period), and even more discouraging is that they aren’t obligated to publicize what doctors/vendors they work with until the insurance actually starts at the beginning of the year - after enrollment has already ended.

The good news is that the insurance agencies don’t predict any trend toward excluding surrogacy in policies, so to date the policies have coverage, even in the Obamacare ACA policies.

Are there other options?

There are additional insurance options, but they won’t be as cost-effective as Obamacare. Especially when planning a twin pregnancy. Companies like Lloyds of London and Allianz occasionally require lengthy qualifying periods or advance payments for some of the costs and also the cost of the basic premium is higher and can reach around $27,000 in total.

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