Understanding the Various Costs of Surrogacy

The decision to become a parent can come with many different financial considerations, and that is particularly true for people looking to have a child via surrogacy. Before choosing this path, there are plenty of factors to evaluate, including the various fees that might creep up along the way. It's natural to have a lot of questions about the process, especially when no two experiences are necessarily the same.

Ahead, we'll break down some of the common costs of surrogacy, along with some unseen emotional costs, with the help of experts and people who have been through the process themselves.

How Much Does Surrogacy Cost?

Intended parents can expect to spend around $120,000 on surrogacy says Jarret Zafran, founder and executive director of Brownstone Surrogacy, a full-service surrogacy agency based in New York. This does not include the cost of embryo creation, which can add significant additional costs. Though numbers may vary, leading clinics including OC Fertility say those extra numbers could be as much as $50,000 to $65,000.

“The first financial hurdle is creating embryos," Zafran says. There are four different possible ways to create an embryo with gestational surrogacy, including donor embryos, donor sperm and/or eggs, using an egg and sperm from the intended parents, or using either the egg or sperm from the intended parents and the other from a donor. "Depending on the egg/sperm sources and any medical diagnoses received, insurance or employer benefits may cover a portion of fertility treatments," he explains. Zafran says that hopeful parents should think about the process in chunks.

The road to the birth of a healthy baby can also be full of detours and delays. Even though couples generally enter the process with a well-laid financial plan, things happen. “Unforeseen events can blow up a carefully crafted budget, such as multiple embryo transfers, another round of embryo creation, pregnancy complications leading to months of bed rest for your surrogate, or a long NICU stay,” Zafran says. Although it is impossible to prepare 100% for the unexpected, it's always good to overestimate potential costs.

The Emotional Costs of Surrogacy

However, it's not only financial costs that parents must consider. Pamela and Jean, a same-sex couple in Massachusetts, knew they wanted to have kids as soon as they got married. And while they'd put aside money for IVF (the women were able to carry their own children, so didn't use a surrogate), there was no preparing for the emotional toll the process would take.

Pamela’s job didn’t lend itself to much flexibility, so Jean was on the hook for months of scheduling appointments and calling doctors, which she says felt like a part-time job. Then, once they had embryos, there were more emotionally fraught decisions to make. “At every corner, it seemed that we had to make a decision using data about some aspect of the process that seemed really consequential: How long we should wait before discarding sperm/embryos? How many eggs should we genetically test? How many vials of sperm should we buy at once?" Pamela reflects.

When you need to work with a surrogate, that adds another layer of emotional vulnerability. Do you like this person? Do you trust them with your pregnancy? What if they get sick? Or hurt? You have to consider a whole host of questions that you might not think about in any other situation.

When emotions get involved, it's understandable that your rational decision-making takes a back seat. This is why it can be helpful for parents to work with a financial planner or counselor in advance to set boundaries. The added external accountability can help slow the process down and introduce a more methodical approach. If egg retrieval isn't as robust as you'd expect, or there is pregnancy loss, the parents’ first inclination might be to try again, even if they can’t yet afford it. Setting up financial boundaries before you're in an emotionally fraught place can help you control these expenses.

Breakdown of Costs

It can be helpful to break down the common costs when budgeting for surrogacy, including legal and agency fees, compensation, and medical care. 

Agency Fees

According to Sensible, a surrogacy agency that aims to offer lower-cost alternatives to traditional surrogacy agencies, most agency fees range between $20,000 to $30,000, although they can vary as much as $10,000 to $50,000. Price aside, it is important to pick the right agency for you. Investigate them and talk to previous clients to get a sense of how they work and if they are the right fit.

Many intended parents find that there are expenses beyond the formal costs associated with legal forms, emotional counseling, and prenatal medical care. This can happen with either a U.S.-based agency or an agency abroad. Intended parents are deeply invested in the birth process and often shoulder responsibility for funding communication, travel to visit the surrogate, occasional gifts, and more.  These acts of generosity can help break down language barriers, build trust, and share solidarity when unexpected events occur. But, they do add to the total cost.

Surrogate Compensation

This can range from $55,000 to $75,000 for total compensation according to Sensible. Some intended parents may try to mitigate this cost by finding a family member or friend who is willing and able to carry a pregnancy for them. Most agencies require payment upfront and in escrow (more on that ahead). "This is the biggest expense," says Zarfan. "Intended parents need to deposit the surrogate's entire compensation into escrow prior to an embryo transfer.”

The surrogate gets paid in monthly installments, starting from the first month after a fetal heartbeat is detected. Surrogate compensation may differ based on their country of residence and the agency. Also, a surrogate’s health coverage may differ based on pre-existing medical coverage (more on health coverage ahead).

Screening Costs for Surrogate

Reputable agencies will vet surrogates by having them undergo psychological testing, criminal background checks, and health reviews. Sensible refers to this as surrogate matching and it can add up to around $12,000 to $20,000.

Legal Fees

The surrogacy contract is essential to establishing the terms of the relationship between the surrogate and the intended parents. In addition to covering legal advice, attorney’s fees might include the preparation of documents like birth certificates, wills and trusts with guardianship provisions for the baby, and immigration and adoption processes. Sensible says these fees can add up to $10,000 or more.

Escrow

An escrow agent ensures that the proper compensation and reimbursements are paid throughout the course of the surrogacy journey. According to Brownstone Surrogacy's cost analysis, their fees can amount to around $1,500 or slightly more.

Taxes 

Although laws vary by state, surrogacy is generally not tax-deductible, but some medical expenses can be. Tax-deductible medical care for a covered patient could include tests needed for the intended parents. Medically proven infertility may be considered a covered condition, so procedures like egg/sperm freezing, IVF, and hormone therapy may be deductible. However, the surrogate is considered a third party who is not being treated for infertility, so their expenses would not be covered by the intended parents’ medical insurance or any tax deductions in their favor. 

Although it is not law, the 2021 IRS private letter ruling 202114001 sets a precedent in a ruling on the deductibility of IVF, gestational surrogacy, and more.

How to Pay for Surrogacy

How you pay for a surrogate will largely depend on your financial situation and your insurance benefits. Some families rely on savings, while others may take out a loan or take advantage of employer-provided benefits, Zafran says.

He adds that some people finance this through dedicated fertility loan companies, like CapexMD and FutureFamily, or home equity lines of credit. “Some intended parents have been known to take a part-time job to access their surrogacy benefits," he says.

There are also ways to get financial assistance, including lesser-known resources like grants and scholarships. Resolve.org, a national infertility association that offers general information about surrogacy options, has a comprehensive list of funding opportunities, as does FertilityIQ.

"People get creative, but the first step is to take stock of all of your assets and figure out what you can rely on at the different surrogacy milestones," Zarfan says.

A Word From Verywell

While the large price tag of surrogacy may seem overwhelming, there are many ways to make the process more cost-efficient and less stressful. If you have a family member or friend willing to be your surrogate or donor, the costs associated with those aspects of the process could be reduced.

Review the fine print of your insurance policies to see if there are health care benefits that apply. And, search the web for surrogacy and fertility grants and scholarships that can lower the cost of growing your family.