Fertility clinics offer In Vitro Fertilization (IVF) refund programs to encourage more patients to try the treatment.
The money-back-guarantee lets couples adopt if treatment does not work.
The clinics design programs where patients share risks. Most couples pay more, so a few get their money back.
Two hidden benefits might affect your decision to participate.
Health screening insider information guides your funding choices for treatment and your goal of pregnancy.
Combining payment and treatment in one year is more tax-efficient. A large refund could make joining a refund program more appealing.
Advantage 1: Insider Information
Insider information is a hidden benefit of in vitro fertilization (IVF) refund programs. However, using insider information to trade stocks is illegal because it is unfair to other investors.
Fortunately, patients can legally use fertility clinic expertise to make smart risk management decisions.
Health Screening
Fertility clinics will screen prospective IVF patients before offering a refund program. The clinic may consider the patient’s age, body mass index, clinical diagnosis, ovarian reserve, reproductive history, and other factors.
Clinics use their screening to exclude patients likely to need a refund. So, if you are offered the chance to join, your odds of success are high.
A FertilityIQ survey shows that patients in IVF refund programs have an 80% success rate, broken down as follows.
- 67% succeed on the first retrieval.
- 13% succeeded on the second retrieval.
- 20% fail to conceive.
Patient Risk Sharing
Fertility clinics offer couples who pass the screening a chance to share risks with other patients. The upfront fee structure should confirm that your odds of success are high, often around 80%.
The clinic might provide an upfront fixed fee schedule comparing the refund program to a pay-as-you-go model, as shown in the chart below.
| Number of Cycles | Pay Separately | Refund Program | Difference |
|---|---|---|---|
| 1 | $18,000 | $35,000 | ($17,000) |
| 2 | $36,000 | $35,000 | $1,000 |
| 3 | $54,000 | $35,000 | $19,000 |
| No Success | $54,000 | $0 | $54,000 |
To determine your expected outcome, apply the mentioned success odds to the pricing table.
- 67% X -$17,000 = -$11,390
- 13% X $1,000 = $130
- 0% X $19,000 = $0
- 20% X $54,000 = $10,800
The expected outcomes sum to nearly zero, confirming your success odds are nearly 80%. What should you do with this information?
- Pay as you go if you can afford $54,000 for treatment and still have funds for adoption. You have a 67% chance of saving $17,000.
- Apply for IVF financing if you can’t afford both treatment and adoption. You might overpay but will likely achieve your goal of having a baby.
Insurance Risk Sharing
Patients approved for an IVF refund program can use their knowledge of future outcomes to make informed insurance decisions. Insurance policies protect against unforeseen hazards.
With an 80% chance of becoming pregnant, the expected benefits should outweigh the extra premium costs. However, you must act before your next embryo transfer, not after.
Medical Insurance
The best medical insurance during pregnancy is neither a High-Deductible Health Plan (HDHP) nor a Preferred Provider Organization (PPO). The ideal policy includes your chosen Neonatal Intensive Care Unit (NICU) as an in-network provider.
Studies suggest that IVF babies are up to four times more likely to be born pre-term and require a NICU stay. Expect enormous medical bills if the NICU is out-of-network with your plan.
Becoming pregnant does not qualify you to change insurance; you must wait for the annual open enrollment to choose a plan that covers your NICU in-network. Schedule your IVF cycles after optimizing your medical insurance.
Disability Insurance
Buy short-term disability insurance before getting pregnant to avoid a twelve-month pre-existing condition exclusion. Get coverage before your next IVF cycle to avoid unpaid maternity leave.
Most states do not require paid maternity leave or temporary disability. Only ten states mandate these benefits: California, Colorado, Connecticut, Hawaii, Massachusetts, New Jersey, New York, Oregon, and Rhode Island.
Hospital Indemnity
You can buy hospital indemnity insurance while pregnant, but no new policy will pay benefits for your upcoming labor and delivery confinement. Get coverage before your next embryo transfer to secure significant benefits.
Studies suggest IVF results in twins 20% to 30% of the time when multiple embryos are transferred. Approximately 25% of twin pregnancies deliver pre-term, requiring a NICU stay, which is about five times the rate for singletons.
Hospital indemnity insurance may pay double benefits for each day twins are confined to a NICU for specialized care.
Advantage 2: Greater Tax Savings
One hidden advantage of IVF refund programs is additional tax savings. The fixed upfront pricing encourages consolidating treatment and costs into one year, maximizing deductions.
IVF expenses are tax deductible in the year the patient receives treatment and pays for the services. Consolidating these expenses into one year helps overcome two limiting factors: 7.5% of adjusted gross income and the standard deduction.
7.5% AGI
Patients in IVF refund programs pay a flat upfront fee for a set number of egg retrieval cycles and embryo transfers. By receiving these treatments within one year, they can minimize the impact of the 7.5% Adjusted Gross Income (AGI) limitation.
Only eligible medical expenses above 7.5% of AGI are deductible, making consolidation more tax-efficient than separation. For example, consider a married couple with a $100,000 AGI:
- Enrolled in refund program: Consolidates spending and treatment in one year, encountering the $7,500 AGI floor once: $7,500.
- Declines the refund program: Spreads payment and treatment over three years, encountering the $7,500 AGI floor thrice: $22,500.
In this example, the couple loses $15,000 in deductible medical expenses by spreading payment and treatment over three years instead of consolidating them into one.
Standard Deduction
Patients enrolled in IVF refund programs are more likely to benefit from itemizing deductions. Total itemized deductions must exceed the standard deduction before any savings begin.
The standard deductions for 2024 are as follows:
- Single or Married Filing Separately—$14,600
- Married Filing Jointly or Qualifying Surviving Spouse—$29,200.
- Head of Household—$21,900.
Itemized deductions include the following:
- Charitable Donations
- Mortgage Interest & PMI Premiums
- State & Local Property Taxes
- $10,000 limit if married
- $5,000 limit if single
- Casualty & Theft Losses
- Unreimbursed Medical & Dental Expenses above 7.5% of AGI
Suppose a married couple with a $100,000 AGI owns a home and pays $7,500 in mortgage interest and $10,000 in property taxes. They would need an additional $11,700 in deductions to make itemizing worthwhile.
Patients enrolled in a refund program are more likely to have enough deductible medical expenses than those spreading costs over several years.
- Enrolled in refund program: $35,000 upfront fee minus $7,500 (7.5% of AGI) equals $27,500.
- Declines the refund program: $18,000 per cycle cost minus $7,500 (7.5% of AGI) equals $10,500.
In this example, the couple does not get any tax savings when paying as they go because the standard deduction is more advantageous. However, consolidated spending might generate a significant refund from itemizing.
Extra tax savings are a hidden benefit of IVF refund programs. Consult your tax advisor to see if a bigger refund might influence your decision to participate.
