By Erin Wood, Senior Vice President, Financial Planning and Advanced Solutions
After my struggle with pregnancy issues, I was surprised by how quickly I found out I wasn’t alone. Friends, relatives, coworkers – people I’d known for years – were suddenly sharing with me a vital but private part of their life. I also hear some of these whispered conversations when I tell people what I do for a living. “Oh, you’re a financial advisor? Can we go somewhere and talk?”
One in eight couples struggle with infertility. Chances are, you know someone who has been through this expensive and exhausting journey or might just be getting started.
The cost of infertility, and subsequently fertility treatment, on a financial level is a painful reality made even sharper by its polite secrecy.
IVF’s High Price Tag
Infertility can include many treatments, but IVF, or in vitro fertilization, is one of the more effective and common treatments. As with many medical procedures, IVF cost can be difficult to account for and ends up being tens of thousands of dollars.
Consider that most patients need multiple treatments before achieving a live birth. (And there’s never a guarantee that IVF will work.) Not to mention the fertility specialist, fertility drugs, and even fertility testing. The medications you need through the process can run into the thousands. Add to that the cost of PTO, and even lodging to be nearer your fertility clinic, while you undergo what can be extensive treatment.
One group estimates the cost is $22,000 per cycle but said it’s not uncommon for an American couple to spend around $50,000 out-of-pocket on infertility treatment.
What About Insurance Coverage?
You might think an insurance card will make the hefty price tag disappear.
Unfortunately, there are only 15 states in the union that require workplace insurance to cover fertility treatments and fertility medication, and coverage is often limited.
Many insurance companies won’t touch infertility treatments, categorizing it somewhere near voluntary and therefore outside coverage.
In a recent survey of 10,000 infertility patients, 71% said they had no insurance coverage on their treatments and the remaining 29% said they had “some coverage.”
Who Can Afford IVF Treatment?
If you’re reading this in middle age with a healthy retirement that is gaining ground, you might have $50,000 in liquid assets for a crucial expense. But what did your liquid assets look like when you were 25 years younger and ready to explore fertility treatment options?
The age when most people seek IVF treatment are the years when they’re laying the foundations of wealth. Think a house down payment, credit card debt and student loans. Freeing up a year’s salary for medical treatments is a sizable challenge if not impossible.
It’s no surprise then that most IVF success stories look that way you might think: white, upper-middle-class, in households making $100,000 or more. If you’re wealthier, you have the income to invest in treatment, whereas those who make less might not be able to afford it at all.
You most likely know people who wouldn’t be able to afford this journey. Or they may be in the midst of depleting savings, agonizing over loan options, risking their credit score, or cashing out retirement plans to make it happen.
Paying for IVF
There are options for couples journeying through IVF and other advanced reproductive care to make the price tag a bit more approachable, though still difficult.
HSA and FSA
IVF is considered a qualified health expense for health savings accounts and flexible spending accounts, which is great news for couples trying to conceive and exploring financing options for a fertility specialist or fertility clinic.
Your HSA in particular is a triple-tax-advantaged fund, a powerful tool for protecting your wealth from medical expenses.
You build your HSA fund through your contributions, and it can only grow at a certain rate, so you’re at an advantage if you’ve been saving for years versus when you learn you need medical assistance to conceive. It’s true that many couples have only had a few years to a decade to build their HSAs. The current contribution limit for a family is $7,100 per year.
An FSA is a tax-deductible account you can contribute to from your paycheck. The annual contribution allowed is $2,750 per FSA. If both spouses have an FSA through their respective employers, they could each elect the maximum for $5,500 per household.
As long as the expenses are qualified, withdrawals are tax-free. The main difference between an FSA and an HSA is that an FSA must be used by the end of the calendar year – it’s a “use it or lose it” situation, with a brief grace period of a few months or limited carryover. The HSA, on the other hand, is yours no matter what, even after you leave your employer.
Your HSA or FSA can help defray the cost of IVF, but it won’t cover the entire bill for most couples.
If you itemize your taxes, you can receive a tax deduction for medical expenses over 7.5% of your adjusted gross income. A tax deduction can work within your plan to help you protect and free up other income. You should include all medical bills – IVF and otherwise – to take you over the 7.5% threshold.
Let’s say you make $100,000 and incur $40,000 in medical expenses via IVF in 2021. You’ve hit the 7.5% threshold, which at that income is $7,500. That means you can deduct the excess of the $7,500 (7.5%) of your medical expenses. In this case, this would be $32,500 because the total expense was $40,000. Anything over that 7.5% is deductible.
Since the Tax Cuts and Jobs Act, the minimum standard deduction is set at $24,800. Deducting $32,500 is an improvement on that and will help keep some of your money, which can be a big benefit when faced with a large expense like IVF. Talk with your financial advisor or accountant about this strategy.
Infertility financial programs, such as specialized IVF loans and shared-risk groups, have emerged. Grants also exist, through channels such as the Nest Egg Foundation, for those who qualify for special fertility financing or a fertility loan.
Financial help for IVF exists, but it reproductive health and fertility care takes extensive planning, patience and luck to get through the process. It’s not as simple as throwing down your insurance card for the vast majority of couples – at least not yet.
A Priceless Journey
I can hear my daughter in the next room as I write this – it’s the sound I wish I could have heard while all those years ago, alone in the operating room, crying my eyes out and thinking of my future family. Every bit of stress, and every last cent, was worth it, of course.
I think of friends and relatives who I know are going through this journey now. Whether it’s someone to talk to, or maybe more importantly not to have to talk to, I want to dispel any rumor of shame or anxiety from their minds. I know firsthand the emotional toll and some of the costs involved.
One in eight. Think about that statistic and the complexity and expense of the journey. One of the best gifts you can offer is a listening ear – not balking at price tags or squirming at medical discussions, but simply being there and being present.
Editor’s note: A version of this article was originally published on Kiplinger.