In the world of surrogacy, you might expect the biggest questions to be around embryos, legal paperwork, or birth plans. But one topic that often catches intended parents off guard is insurance — who’s covered, for what, and how.
In Australia, surrogacy is legal in most states but not commercially funded, which means there’s no dedicated insurance product built just for it. Instead, coverage is pieced together from Medicare, private health insurance, and — occasionally — life or income protection policies.
It can be confusing. Here’s a practical guide to understanding how insurance works in surrogacy, what gaps to look out for, and how to plan ahead.
1. IVF and Funding: Who’s Covered and When?
In almost all cases, a surrogacy journey begins with IVF treatment — where embryos are created using the gametes (eggs and/or sperm) of the intended parents or donors.
Here’s what you need to know:
- IVF is carried out at a fertility clinic, and is typically paid for by the intended parents
- If one of the intended parents (usually the egg provider) is undergoing treatment themselves, Medicare may offer a partial rebate for eligible procedures
- If the egg provider is a donor, or the embryo is already created, the surrogate will later undergo an embryo transfer
Medicare does not cover IVF costs for the surrogate — because she is not the patient being treated for infertility. If an embryo transfer is required, this is billed privately.
Fertility clinics will usually require that:
- All parties have completed legal counselling and advice
- The IVF cycle is paid for upfront
- Any associated medications, storage fees, or donor costs are also covered privately
IVF is usually the first major expense of a surrogacy arrangement — and one that falls entirely outside of insurance coverage unless the IPs meet Medicare rebate eligibility in their own right.
2. Medicare: What’s Covered (and What’s Not)
Assuming your surrogate is an Australian citizen or permanent resident, she’ll be eligible for Medicare, which will cover most of the standard pregnancy and birth-related costs.
That includes:
- GP visits and referrals
- Standard pathology tests and scans (e.g. dating, anatomy scan)
- Public hospital care, including labour and delivery
- Postnatal check-ups and basic care
However, Medicare won’t cover everything. Some specialist consultations, non-routine tests, or elective procedures may attract out-of-pocket costs — especially if the surrogate chooses or needs to see a private obstetrician or deliver at a private hospital.
Important: As above, Medicare won’t cover IVF procedures for the surrogate, even if the embryo is being transferred into her body.
3. Private Health Insurance
Some surrogates already have private health insurance. Others may not — and that’s where intended parents often step in to help.
Why might private cover matter?
- It may cover the surrogate’s hospital fees if she gives birth in a private hospital
- It can reduce or eliminate out-of-pocket costs for an elective caesarean
- It may give her more choice of doctors, more flexibility around delivery preferences, and a private room post-birth
If private insurance is used, make sure:
- The hospital cover includes pregnancy and birth, not just general health
- There’s no waiting period — most funds have a 12-month waiting period for obstetrics.
- The surrogate’s partner (if applicable) is also covered, if needed for support during admission
If your surrogate doesn't have private insurance and wishes to birth publicly, that’s absolutely fine — the Australian public system provides excellent care. But talk openly about what’s important to her, and whether additional coverage might ease the journey.
4. Can intended parents pay for private health insurance?
Yes — in most altruistic surrogacy arrangements, intended parents can reimburse or pre-pay for the surrogate’s out-of-pocket medical expenses, including private health insurance premiums. This must be clearly agreed upon and documented as part of the surrogacy agreement.
The goal is to ensure the surrogate isn’t left out of pocket for reasonable and anticipated expenses related to the pregnancy.
5. Life, TPD, and income protection insurance
It’s also worth considering:
- Life insurance and Total and Permanent Disability (TPD) cover, in case of rare but serious complications during pregnancy or birth.
- Income protection insurance for the surrogate, especially if complications lead to time off work beyond standard leave.
Some surrogates already have these policies in place; others may not. Intended parents can usually cover the cost of a short-term policy for the duration of the pregnancy, again with clear documentation in the agreement.
6. Insurance for the baby
While not strictly a “surrogacy” insurance issue, it’s wise for intended parents to look into:
- Newborn coverage on their private health fund
- Whether their policy covers the baby from birth or only after a waiting period
- Any required paperwork for adding the baby to their Medicare and/or health insurance after the parentage order is granted
Some private funds require notification within days of birth, so it’s worth preparing ahead.
