Market Outlook for Assisted Reproductive Technologies (ART)

The use and coverage of fertility services has increased steadily over the last several years. Claims data suggest that utilization of in vitro fertilization (IVF) and egg/embryo storage among women 18 to 45 years old has experienced a year-over-year increase of roughly 13% and 22%, respectively, from 2017 to 2021 (Avalere analysis of national FAIR Health claims data, 2017–2021). This growth has occurred in parallel with growing demand: over the same period, the prevalence of infertility diagnoses in this group increased from 16 to 22 women per thousand (Avalere analysis of national FAIR Health claims data, 2017–2021). Additionally, as individuals without an infertility diagnosis defer the decision to have children, the median age for giving birth in the US has reached 30 years old, the highest it has ever been. From 2015 to 2020, large employer groups’ coverage of IVF increased from 36% to 42%, and third-party fertility benefit managers now manage a growing proportion of fertility benefit packages. At least 20 states currently offer or mandate coverage of some type of fertility services (14 of which include IVF coverage), with others slated to begin in 2023. Despite strong demand for services and a largely adequate provider supply, new legislative effects on reproductive care may make fertility care more operationally complex.

Source: Avalere analysis of National FAIR Health Claims Data, 2017–2021

Employer Coverage of ART and Use of Third-Party Fertility Benefit Managers

While state mandates dictate the level of coverage for fertility services in some states, employer group coverage continues to be a more material driver of ART growth. Employers cite ensuring access to quality care, being a family-friendly employer, and staying competitive to recruit and retain top talent as key objectives of providing fertility benefits. Within fertility coverage, many large employers are interested in expanding their fertility benefit offerings, particularly for IVF and egg freezing. Of large employers who do not currently cover IVF, nearly 20% are likely to add this benefit within the next two years. While employer groups typically place limits on ART coverage through lifetime maximum benefits or caps on the number of IVF cycles covered, the use of third-party fertility benefit managers has allowed for unique benefit structures and bundling of services to optimize treatment within the employee benefit plan.

Employers increasingly work with specialized vendors to administer fertility benefits for both infertility treatment and fertility preservation services. Third-party fertility benefit managers have driven the ability to provide these services through options like bundled cycles, the use of integrated pharmacy benefit managers, enhanced coaching and therapy, and the integration of care navigation and care delivery. Patient-facing digital tools have also enhanced the employee experience by improving access to holistic care throughout the ART process and pregnancy. Offering ART benefits has achieved positive outcomes by ensuring access to quality, cost-effective care, with over 70% of offering employers reporting positive outcomes from the benefits. Nearly all employers who offer this benefit have reported no significant medical plan cost increases, as the cost of coverage is offset by savings from eliminating other medical plan costs, such as multiple births, medically complex pregnancies, and increased provider visits.

Impact of Reproductive Issues on the Midterm Elections

Though tailwinds exist in the fertility industry, new challenges may arise as political and legal battles over reproductive health move predominantly to individual states. The midterm elections demonstrated the major role abortion and related issues can play in state dynamics and operations.

While many pundits expected economic issues like inflation and former President Trump’s endorsements to drive a “red wave” of victories in the midterm elections, concerns about abortion and reproductive health played a greater-than-expected role in many races. A post-election survey revealed that the overturning of Roe v. Wade drove voting decisions for 38% of voters, including over half of Black women, Hispanic women, first-time voters, and voters under the age of 30. Though only a tenth of registered Republicans identified abortion as their key issue, roughly a fifth of that group (2%) voted for a Democrat in the Senate races in Pennsylvania and Arizona. Making abortion a key issue during campaign season helped propel Democrats to victory in Virginia, Minnesota, New Mexico, and Michigan—where Democrats now have the first Democratic trifecta in state legislature history—and in Pennsylvania, where it ranked as the most important issue in exit polls.

Beyond Congressional races, four key ballot measures addressed abortion and reproductive issues. Voters in three states (California, Michigan, and Vermont) voted in favor of specific protections for abortion, while voters in Kentucky voted against an amendment that would have banned abortion. Notably, the Michigan amendment includes language that explicitly protects the right to make all decisions about pregnancy, including infertility. Voters in states with close races demonstrated that reproductive health a core social, political, and healthcare issue after Roe.

How States May Shape Access to Reproductive Health

Fertility treatment is a separate issue from abortion, but the way that bills restricting access to reproductive care are written may create unintended difficulties for recipients and providers of fertility treatment. The greatest operational risk exists in bills that define human personhood as beginning at the time of fertilization, since strict interpretation of such language could support the argument that an unimplanted embryo is a legal person. Bills can be broadly grouped by their impact on three main activities related to fertility treatment: selective reduction, the disposal of unused embryos, and preimplantation genetic screening (PGS).

• Selective reduction is the process by which certain fetuses in a multiple pregnancy are terminated to maximize the chances of successful and uncomplicated delivery and to minimize the medical risk to both mother and future child. Though less prevalent than it once was due to improved technology and updated safety standards, selective reduction remains an important aspect of IVF, particularly in instances where multiple embryos may be implanted at once to streamline the process and reduce costs. Total abortion bans or restrictions based on gestational age could affect physicians’ ability to offer IVF safely and efficiently.
• The disposal of unused embryos is another key issue in the fertility space post-Roe. Since the American Society of Reproductive Medicine now typically recommends that only one embryo be transferred into the uterus at a time, most IVF patients have multiple frozen embryos in reserve. If those embryos are not later transferred, they must at some point be disposed of. In states where the definition of personhood begins at fertilization, disposing of such embryos may become more expensive, operationally complicated, or illegal.
• PGS refers to genetic testing of an embryo before it is implanted in the uterus to assess whether that embryo is affected by chromosomal abnormalities. Testing can be used to verify the number of chromosomes present, as well as to check for the presence of specific genetic disorders. PGS is often a standard part of an IVF cycle, so legislation that prevents patients and physicians from considering the results of PGS in reproductive decision-making may affect IVF clinics, providers, and patients.

Going forward, challenges and opportunities will exist primarily at the state level. Alabama and South Carolina’s abortion bans, for example, have a specific carve-out for IVF embryos, while Louisiana specifically defines an IVF embryo as a juridical person, making such embryos potentially subject to its abortion ban. Operationally, most ART providers in Louisiana do not dispose of embryos within the state and instead ship unused embryos to other states for disposal; operators in other states with similar political climates may follow suit. Pending legislation in Tennessee, Florida, Arizona, and other states may affect the scope, accessibility, and affordability of fertility treatment. More restrictive laws may also generate second-order effects on insurance coverage, fertility benefit managers, and LGBTQ+ and other couples looking to form families through IVF or surrogacy.

IVF and Anti-IVF Advocacy

Anti-abortion positions are not necessarily anti-IVF, but anti-IVF advocacy does exist within the broader anti-abortion movement. Groups including Americans United for Life and Students for Life have voiced explicit concern about the moral status of IVF. At the same time, no major national effort to target IVF has been identified, and some prominent anti-abortion politicians such as Mike Pence have stated a belief that fertility treatments deserve legal protection. In mid-December 2022, Senators Duckworth (D-Ill) and Murray (D-Wash) introduced the Right to Build Families Act of 2022, which would prevent states from interfering with ART.

Anticipating more targeted challenges in individual states, RESOLVE: The National Infertility Association is beginning a new initiative called Fight for Families. This campaign, set to kick off in 2023, will engage with state legislatures through lobbying and advocacy against abortion bans and personhood laws that might impact IVF access. The initiative will also track and monitor legislation and share doctor and patient stories with the public.

Conclusion

The utilization and coverage of fertility services has increased materially in recent years, propelled by state coverage mandates, increased employer group coverage, expanded use of third-party fertility benefit managers, and cultural shifts leading to increased demand. At the same time, the overturn of Roe v. Wade may inadvertently place operational restrictions on ART providers and coverage. While no clear threat to IVF exists at a national level, the way that individual states pursue legislation related to reproductive health will likely create unique challenges for patients and providers in those markets. Fertility-based businesses will require detailed knowledge of the state environments in which they provide care to prepare for operational difficulties that may arise.

As new legislative dynamics take hold in 2023, states will play an outsize role in determining the nature and scope of reproductive health access post-Roe. If your organization would benefit from granular analysis of opportunities and risks related to fertility businesses or investments, connect with us.