Surrogacy and Medicare: Why the Outdated Exclusion Needs to Go

Why Is Surrogacy Still Excluded from Medicare?

In this episode of the Australian Family and Fertility Law Podcast, Stephen Page dives into a long-overdue issue: the exclusion of surrogacy from Medicare funding in Australia.

Greens Senator Larissa Waters has announced plans to scrap this outdated exclusion — a move Stephen strongly supports. But why has it taken so long? And why are some outlets reporting wildly inflated costs to taxpayers?

Stephen breaks down: The history of the Medicare surrogacy ban

• The real (and very reasonable) cost of reform
• Why political will—not legislation—is the only thing standing in the way
• His hope for bipartisan support across government

For would-be parents navigating surrogacy, this change would be life-changing — and it’s time Australia caught up.

The History of Surrogacy and Medicare in Australia

To understand why surrogacy remains excluded from Medicare, it’s essential to revisit the origins of Medicare’s coverage of assisted reproductive services. Since 1991, Medicare has funded a range of fertility treatments, including in vitro fertilisation (IVF). However, from the outset, surrogacy was explicitly excluded. This exclusion was largely a reflection of the social and legislative attitudes of the time.

Back in the early 1990s, surrogacy was a highly controversial topic. In some Australian states, such as Queensland, all forms of surrogacy were illegal. The idea of a woman carrying a child for another person or couple was met with suspicion and moral concern. As a result, when Medicare began covering fertility treatments, surrogacy was left out.

Over the past 10 to 15 years, significant legal reforms have taken place across Australia. Laws were passed in various states to permit altruistic surrogacy, recognising it as a legitimate family-building path for many. Yet, despite these reforms, the Medicare exclusion has stubbornly remained in place. The policy has not caught up with the evolving legal landscape or with the realities faced by people pursuing surrogacy.

Why Has the Exclusion Persisted?

The persistence of the surrogacy exclusion is perplexing. When the Medicare Benefits Schedule Committee reviewed assisted reproductive services in 2021 under the Morrison government, it recommended lifting the exclusion. However, the government took no action, leaving the recommendation to gather dust.

In 2023, efforts to push for change reignited. A letter was sent to the then-Health Minister, Mark Butler, requesting the removal of the exclusion. The response was deflective: the minister advised raising the issue through a Senate inquiry into reproductive healthcare. This response was met with surprise and frustration by advocates who felt the government was passing the buck rather than taking responsibility.

Greens Senator Larissa Waters has since taken up the cause, announcing plans to remove the exclusion. This development has been welcomed by many in the surrogacy community, including legal experts who have long argued the policy is outdated and unjust.

The Real Cost of Removing the Surrogacy Exclusion

One of the main arguments cited against lifting the surrogacy exclusion has been the supposed astronomical cost to taxpayers. A media report from The Courier-Mail claimed that removing the exclusion would cost taxpayers $4.5 billion. This figure, however, is wildly inaccurate and misleading.

Based on detailed analysis, the actual cost of including surrogacy under Medicare coverage is estimated to be less than or around $1 million per year. To put this into perspective, consider the cost of a single IVF cycle:

• Out-of-pocket cost for couples: approximately $10,000 to $12,000
• Cost to the taxpayer via Medicare: about $5,000 per cycle

Surrogacy is a far less common pathway to parenthood compared to IVF cycles, meaning the total number of cases and therefore the total cost to the public purse is relatively small. The $4.5 billion figure is not based on any realistic assessment of surrogacy usage or costs, but rather appears to be an inflated scare tactic.

For those undergoing surrogacy, even the current small costs can be a significant financial burden. Removing the exclusion would provide much-needed relief and recognition of surrogacy as a valid and valuable reproductive option.

Why Political Will, Not Legislation, Is the Key

Another misconception is that removing the surrogacy exclusion requires complex legislative changes. This is not the case. The exclusion is embedded in Medicare regulations, which can be amended without passing new laws through Parliament. The main barrier to reform is political will. Governments have the power to update these regulations but have so far failed to act decisively.

This regulatory change would be straightforward and could be implemented relatively quickly once there is consensus and commitment from political leaders. It is a matter of prioritising fairness and inclusivity in reproductive healthcare policy.

The Impact on Families and the Surrogacy Community

For many people, surrogacy is more than just a medical procedure — it is a deeply personal journey toward parenthood. The exclusion from Medicare funding adds unnecessary financial strain and reinforces a sense of marginalisation for those who choose or need surrogacy.

Surrogacy families come from diverse backgrounds, including LGBTQ+ couples, single parents, and heterosexual couples with medical reasons preventing pregnancy. Denying Medicare coverage based on an outdated exclusion undermines the principles of equality and access to healthcare.

Removing the exclusion would send a powerful message that all paths to parenthood are valued equally. It would also align Australia’s healthcare system with contemporary social and legal realities, supporting families in the best way possible.

Altruistic Surrogacy and Its Role

The laws enabling altruistic surrogacy across Australia recognise that surrogacy should not be a commercial transaction but a generous gift. This ethical foundation makes it even more reasonable that the government should support these families through Medicare funding.

Supporting altruistic surrogacy through Medicare would reduce financial barriers that could otherwise discourage or prevent people from pursuing this option. It would reflect a compassionate approach to family-building that respects the contributions of surrogates and the needs of intended parents.

Looking Ahead: Hope for Bipartisan Support

The announcement by Greens Senator Larissa Waters to remove the surrogacy exclusion has sparked renewed hope for change. Advocates are calling on major political parties to join the Greens in supporting this reform.

Given the minimal cost involved and the significant benefits for families, there is a strong case for bipartisan support. This issue transcends party politics; it is about fairness, healthcare equity, and recognising the evolving nature of families in Australia.

Removing the surrogacy exclusion from Medicare would be a relatively simple but meaningful reform. It would provide tangible help to parents and surrogates and reflect Australia’s commitment to inclusive and modern reproductive healthcare.

What Needs to Happen Next?

1. Government commitment to update Medicare regulations to include surrogacy.
2. Cross-party cooperation to ensure swift implementation of the change.
3. Public awareness campaigns to inform families and healthcare providers about the new coverage.
4. Continued advocacy from legal experts, medical professionals, and surrogacy communities to monitor and support the reform.

Conclusion: Time to Let the “Guest Who Wouldn’t Leave” Finally Go

The exclusion of surrogacy from Medicare funding is a relic of a bygone era when surrogacy was misunderstood, feared, or outright illegal in many parts of Australia. Today, the legal framework supports altruistic surrogacy, families are more diverse than ever, and the need for inclusive healthcare policies is clear.

The outdated exclusion has been hanging around like the proverbial “guest who wouldn’t leave” since the 1990s. It’s time for Australia to move forward and remove this unnecessary barrier. The financial cost to taxpayers is minimal, the regulatory change is straightforward, and the positive impact on families would be profound.

All Australians deserve equal access to reproductive healthcare, regardless of the path they take to parenthood. Removing the surrogacy exclusion from Medicare is a crucial step toward achieving that goal.

For families navigating the complex and emotional journey of surrogacy, this change would be life-changing. It would offer not only financial relief but also recognition and respect for their choices and experiences.

It’s time for the government and all political parties to show the leadership and compassion this issue deserves. Let’s ensure that surrogacy is no longer the “guest who wouldn’t leave,” but rather a fully supported and accepted part of Australia’s reproductive healthcare system.