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Fertility on a Budget

Lesson 3 of 6

Insurance 101

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Basics on Coverage

In this section we’ll discuss the basics of insurance plans that are popular in the United States. The information here may not apply to your particular insurance plan, and we encourage you to consult with your own health plan administrator.

Unfortunately, in the U.S., most patients do not have coverage for fertility treatment, and those who do face limitations in what aspects of treatment are covered. Regardless, there may be ways to use your medical coverage to your benefit. We’ll discuss how to maximize your coverage here.

First let's cover some basic definitions as it pertains to medical insurance coverage in general, before we dive into fertility related specifics.

Premiums The baseline amount you pay for health insurance. This amount could be paid directly to a health insurance company or paid by a paycheck deduction through your employer. This amount does not include deductibles, copays, or co-insurance (which we’ll cover next).

Deductible The amount you pay for approved health and medical services before your insurance kicks in and begins to pay. You may have a second deductible for prescription drugs. The deductible amount varies plan to plan with lower deductibles being associated with higher premiums and higher deductibles being associated with lower premiums.

To make this concrete, let’s look at how a $4,000 fertility treatment bill for IUI will impact patients with two differing deductibles (presuming neither has already met their deductible).

Co-insurance: This is a set percentage of cost you pay after you’ve paid your deductible. For example, once you’ve paid your deductible, your insurance may pay 80% of the costs, which means you would have a 20% co-insurance.

Let’s look at how patients with two different levels of co-insurance (say 20% versus 50%) are impacted financially should their employer cover fertility treatment.

Often, we’ll see plans will have differing levels of co-insurance depending upon whether you see a doctor or clinic that’s in network (lower co-insurance) or out of network (higher co-insurance).

Fertility Coverage: As we mentioned above, most insurance plans do not cover fertility treatment. Those that do often have a “cap”, which is a maximum amount they’ll pay toward fertility. This amount is often (but not always) a “lifetime” maximum and rarely resets annually. Like co-insurance, this represents a major swing factor in what patients will pay.

Let’s look at how two policies with very different “fertility coverage” (e.g a $50,000 maximum vs a $10,000 maximum) impact what a patient will pay. Let’s presume a patient accrues a $60,000 IVF bill (say three IVF cycles, which is about what it takes for most patients to deliver) and has already met their deductible. As you can see, the difference is substantial. So how much coverage is available is pivotal.

Out-of-pocket max: This number represents the most you would have to pay for covered services in a plan year. After you’ve met this amount in deductibles, copayments or coinsurance, your health plan pays 100% of the costs of covered medical services. This number does not include your monthly premiums, which you would still be responsible for.

Copay: This is a set amount you pay for covered health care services once you’ve paid your deductible. The copay amount can vary depending on the type of services (primary care vs specialist, etc.) For example, you may have a $20 copay to see your primary care provider, but a $50 copay to see a dermatologist. In the grand scheme of things, copays end up being less of a factor when one considers the bigger variables (e.g. deductibles, co-insurance, fertility maximums).

These maximums & your deductible resets annually, so make sure you are starting treatment at an appropriate time of year. We'll cover this topic more in the next chapter.

Basics on HSAs & FSAs

While many employers don’t pay for fertility treatment, most do help fund HSA & FSA accounts. In the case of both (which we’ll dissect in a moment), patients can use “pre-tax” dollars to cover medical expenses (which nearly all forms of fertility treatment quality as).

Health Savings Account (HSA): An HSA allows you to save money pre-tax and use that money on eligible medical expenses. The money you save is yours to keep and does not expire.

Flexible Spending Account (FSA): An FSA allows you to use pre-tax dollars on eligible expenses, some FSAs are specifically earmarked for healthcare, which others may be utilized for other approved expenses. FSA dollars are considered “use it or lose it” and must be used prior to the end of the year.

Using pre-tax dollars for medical care can offer savings for fertility patients.

As an example, let’s presume a patient earns a salary of $50,000. After paying taxes (say 25%), the patient has $37,000 remaining for both living and medical expenses.

Alternatively, let’s assume the patient chooses to contribute $5,000 to their HSA or FSA. In this case only $45,000 is considered taxable income. After paying taxes at 25% the patient is left with $38,750 including $5,000 set aside specifically for qualified medical expenses. With an FSA that money must be used by the end of the calendar year, but with an HSA that money can be saved & accumulate with further contributions over time.

Important note: In the US, the IRS sets a limit each year on the amount that can be contributed to an HSA or FSA. These numbers were selected as a rough example only, and tax sitatuions vary person to person. You should speak to a tax professional about how an HSA or FSA may work best for you.

Questions to Ask Your Health Plan Administrator

Once you have a basic grasp on your plan’s details (e.g. deductibles, co-insurance), it’s important to have a discussion with your employer (often someone in “Human Resources” and within that department, focused on “Benefits” or “Total Rewards”) to understand what, if anything, is covered from a fertility perspective. Your plan is required by law to provide a benefits book, which outlines exactly how coverage works for the type of care you’re seeking.

What Fertility Services Are Covered

The process of accessing fertility treatments often can be broken down into two stages: the initial diagnosis and the treatment itself.

The costs an insurance plan covers depends upon three factors, namely:
- The nature and limitations of the plan itself
- Any diagnosis you’ve been given that relates to fertility challenges
- Any approaches you’ve previously attempted and the results they’ve shown

Often, but not always, plans that don’t cover “treatment” will cover components for the “initial diagnosis” (e.g; basic blood work) especially if some of the process is performed at an in-network OB GYN. This can often save patients hundreds of dollars.

As for treatment, many plans don’t cover any facet of treatment (e.g. IVF), while others will cover it only if the patient profile (e.g. diagnosis, age) suggests to the employer and plan the benefits of treatment outweigh the risks and cost.

To make this more concrete, let’s look at some actual policies. In the below example,you’ll see the plan covers “diagnosis and treatment” (example #1). However, as you’ll see in the next line (#2), it only applies when the “infertility is the result of malformation, disease, or dysfunction.”

As you’ll see, clauses like this often stand to exclude hopeful parents who are single, LGBTQ, egg freezers and more. In note #3, you’ll see the coverage for “Basic infertility services” (which seems extensive) really just covers initial testing.

Note #4 below refers to “comprehensive” coverage, and in fact basic, less expensive options like oral medications (e.g. clomiphene, letrozole) are likely covered (#5) as is IUI (#6) which is often referred to as “artificial insemination”. However, treatments like IVF (#7) or services for patients pursuing surrogacy (#8) are excluded.

Drug Coverage

Most fertility interventions are accompanied by drugs and in the case of IVF, those costs can range from $3,000–$10,000. Some policies that don’t cover treatment may still cover less expensive oral agents (like clomiphene or letrozole).

Other policies that cover fertility treatment more broadly tend to include prescription drug coverage in a total fertility maximum, while others may have a seperate maximum for fertility drugs and some may not specify (which often means coverage falls into the rubric of how other prescription drugs are covered). Below are examples of all three from actual policies. Typically, a plan will require a patient to get drugs from a pharmacy that is in-network and require co-insurance (often a similar percentage to the co-insurance cited for treatment).

What Type of “Pre-authorization” Is Required?

Many plans that cover aspects of fertility treatment require “pre-authorization” whereby the insurer has reviewed your profile and determined whether treatment will be covered.

Not all plans require “pre-authorization,’ but most do. The process can be used to ensure you’re going a clinic that’s “in-network” (a process insurers call “steerage”) or to determine if you’ve met any requirements to access certain forms of care (e.g. tried a certain number of lower-cost IUIs before advancing to IVF).

How arduous the pre-authorization process is is a function of the plan’s complexity and what documentation (if any) the insurer has about your circumstances (e.g. your age, previous attempts to conceive, testing, diagnoses, and more).

What Exclusions Exist?

Many plans that “cover” fertility treatment will do so for only specific patients. Below is a sample of another policy, which elucidates who can benefit in this circumstance.

#1:“Covered People”

At the policy’s outset, it’s made clear who’s covered. The degree to which unmarried or common-law partners are covered tends to vary by policy and adding another person to a policy often can only happen under special circumstances (e.g. marriage, establishment of a domestic partnership) or when the policy is set to renew. This provision also provides the insurer latitude to exclude treatments associated with a “third party” (e.g. egg donor, sperm donor, gestational carrier).

#2: Failed to Achieve Pregnancy After Intercourse or Donor Insemination

This is a requirement that people have taken steps to have egg and sperm meet. For the most part, these stipulatons tend to exclude single and gay men. While the “donor insemination” provision eventually allows single and lesbian women to access treatment, coverage only kicks in after 6–12 failed attempts. Each round of donor insemination requires cost and effort (see our course on IUI here), and many view the stipulation as inequitable (heterosexual couples don’t need to subject themselves to treatment to have unprotected intercourse) and counterproductive (delays in accessing care can hurt the odds of success).

Conversely, most plans that are LGBTQ- and single person- friendly often make explicit mention of this because, more often than not, if a plan is “silent” on the subject, the boilerplate language tends to exclude these groups.

#3: Factors of Age

As you can see in item #3 in the above example, plans also tend to exclude coverage for patients over a certain age. Often the policy is focused on female age and makes the distinction of whether one’s eggs or donor eggs will be used. In the case of a cutoff for one’s own eggs, often insurance plans cite data (like that below) that shows the dramatically reduced odds of success for patients in their 40’s and older. It’s also customary, but not universally true, for clinics to apply similar age cutoffs. When plans apply age cutoffs in the context of donor eggs (which are from presumably young women and have high odds of success), they cite the dangers in carrying a pregnancy over a certain age (e.g. 50).

Third-Party” Reproduction:

As we mentioned earlier, often policies that cover fertility treatment won’t cover the costs of treatment associated with someone who’s not on the policy. Specifically, many plans exclude costs associated with having eggs removed from a donor, procuring and treating donor sperm, or the transfer of embryos to (or pregnancy of) a gestational surrogate. Some policies, like the one below, make explicit mention of the exclusion. Many policies tend to be silent, which generally means aspects (or the entirety) of the third-party treatment won’t be covered.