Frozen Embryonomics

Alabama rules that frozen embryos are people

The Alabama Supreme Court just ruled that frozen embryos are people.

This obviously has big pro/anti-abortion implications. I’ll tiptoe around those with a Crouching Tiger, Hidden Dragon-like grace (just assume that whatever your stance is, I wholeheartedly agree) while instead trying to cover some of the economic (and maybe even fiscal!) implications.

Quick Background

In vitro fertilization is a process wherein a woman’s eggs are extracted, fertilized in a laboratory, and then transferred into a woman’s uterus. During IVF, the doctors fertilize as many eggs as possible, implant one, and freeze the rest so that if a pregnancy fails, they can try again without having to repeat the first couple steps of the process. This is an efficient way to do it because IVF costs generally range from $20,000-$30,000 per cycle.

This process resulted in about 100,000 births in the U.S. in 2021, or somewhere between 2-3% of all births. In Alabama, more than 1,200 IVF procedures were performed in 2021, resulting in over 430 infants being born.

Alabama Specific Implications

In the relevant case in Alabama, the plaintiffs had signed an agreement that their frozen embryos could be destroyed (or donated for research) after five years, but it’s not clear if this ruling allows for those frozen embryos to ever be destroyed. That—and so much more—will have to be hashed out by the legislature.

This matters because storing a frozen embryo isn’t free. Based on a quick search, annual costs typically range from about $500-$1,000 per year per embryo.

This puts would-be IVF patients in a tough situation. If the legislature decides you can’t legally destroy your frozen embryos, you could be looking at exorbitant storage costs over time. (That’s in addition to any further legal risks which, again, is not the point of this post).

Take, for instance, this couple in Alabama who currently has ten frozen embryos. If forced to store those embryos long term, they could be looking at $100,000s in costs. Unsurprisingly, they’re considering moving their frozen embryos out of state.

This is also tricky for the five IVF clinics in Alabama. It’s already the case in most places that clinics can’t really do anything with frozen embryos if the client stops paying the storage fees (at least during the agreed upon storage period), but now they might be unable to destroy or donate the embryos at any point. They could also be subject to wrongful death lawsuits if embryos are mishandled.

Best case scenario, this makes IVF significantly more expensive in Alabama as providers price in liability. Worst case scenario, some or all of the state’s IVF clinics shut down.

Beyond IVF

Georgia recognizes a fetus as a living person starting around 6 weeks. That definition obviously came about for abortion-related reasons, but it also means that any unborn child with a detectable human heartbeat is eligible for the $3,000 Georgia individual income tax dependent exemption.

That’s not all. Fathers of unborn children are liable for child support, and unborn fetuses are included in some population counts. Presumably pregnant women can drive in HOV lanes (an argument that has actually worked in other states recently).

This begs the question: for tax purposes, are frozen embryos now considered dependents in Alabama? My guess is no (a dependent has to live with you for more than half the year), but if so, the tax savings of having a few could quickly dwarf storage costs.