Governor Newsom Vetoes AB 2066: What It Means for Surrogacy in 2027
***NEWSLETTER***
On September 30, 2026, Governor Newsom vetoed AB 2066, a bill that would have made pregnancy a qualifying life event for buying or changing individual health coverage in California.
The bill had received unusually broad legislative support. The bill passed both houses without a single "no" vote, so the veto caught many people off guard. The veto therefore closed the door, at least for now, on a new enrollment option that could have been particularly relevant to California’s surrogacy community.
Governor Newsom’s message returning the bill to the legislature stated:
I am returning Assembly Bill 2066 without my signature.
Last year I vetoed a substantially similar bill because it would create a dangerous precedent condition-specific special enrollment periods and created substantial instability in the individual health insurance market. These concerns remain, especially at a time when consumers across the nation face uncertainty about the affordability of their healthcare due to the federal administration’s draconian cuts to our safety net.
For these reasons I cannot sign this bill.
For surrogates, intended parents, agencies, attorneys, and insurance professionals, the practical message is much simpler: For 2027, a surrogate’s health coverage still needs to be addressed before she becomes pregnant, not afterward.
What AB 2066 Would Have Done
AB 2066, authored by Assemblymember Celeste Rodriguez of San Fernando, was relatively narrow in scope. It would have added pregnancy to the list of triggering events under California law that permit an individual to enroll in or change an individual health plan outside the annual open enrollment period.
The legislation applied to the individual insurance market, including plans purchased through Covered California and applicable plans purchased outside the exchange. It did not create the same enrollment right for employer group coverage.
Once pregnancy became the triggering event, an eligible individual generally would have had 60 days to enroll in or change individual coverage.
For the gestational surrogacy community, that would have created something California does not currently have: a potential opportunity to change individual health coverage after pregnancy began, even if the annual open enrollment period had already closed.
That option will not exist for 2027.
What the Veto Means for Surrogates
With AB 2066 vetoed, pregnancy itself does not create a special enrollment period in California. The basic rules that applied in 2026 therefore continue into 2027.
For a gestational surrogate, the policy in place when embryo transfer occurs may, as a practical matter, become the policy upon which the pregnancy depends unless another qualifying event occurs or the next annual open enrollment period arrives.
That makes the insurance review before transfer particularly important.
A policy may provide maternity coverage while still containing provisions that create significant surrogacy exposure. The plan may contain a surrogacy exclusion, reimbursement provision, lien language, notice requirement, limited provider network, substantial deductible, or significant out of pocket obligations.
If those issues are discovered after pregnancy begins, the parties may have fewer options for correcting them.
A surrogate cannot simply change individual plans in the middle of the year because the existing policy is unfavorable for surrogacy. She would generally need another qualifying event, such as loss of qualifying coverage, marriage, or a qualifying move, or she would need to wait for the next open enrollment period.
The veto therefore reinforces a principle that has always been central to surrogacy insurance planning: review the coverage before transfer.
What the Veto Means for Intended Parents
For intended parents, determining how maternity care will be funded remains a complex and highly individualized part of the surrogacy journey.
The total cost cannot always be predicted in advance. Pregnancy may be uncomplicated, or it may involve extensive imaging, specialist care, hospitalization, additional monitoring, cesarean delivery, or postpartum complications. The financial exposure also changes depending upon whether expenses are paid through traditional health insurance, a specialty surrogacy policy, direct payment, or some combination of those mechanisms.
If the surrogate’s existing coverage is not appropriate, the parties generally need to address the problem during open enrollment rather than assuming they can change plans after pregnancy occurs.
Depending upon the circumstances, options may include changing individual coverage during open enrollment, evaluating available employer coverage, purchasing a specialty surrogacy maternity policy, or budgeting for expenses that may need to be paid directly.
There is another important consideration when the surrogate’s health plan contains a reimbursement or lien provision.
Some plans will pay the surrogate’s maternity expenses and later assert a right to recover some or all of those payments because the pregnancy occurred pursuant to a compensated surrogacy arrangement. The amount demanded by the health plan should not automatically be treated as the final amount owed.
Experienced lien counsel may be able to analyze the governing plan language, determine the scope of the reimbursement right, identify applicable limitations, and negotiate the claim. In appropriate cases, lien resolution may materially reduce the reimbursement obligation and the ultimate cost of maternity care.
This is why intended parents are best served by treating insurance, legal planning, and potential reimbursement exposure as parts of the same financial conversation rather than addressing each only after a problem arises.
Why Fall 2026 Is Now the Decision Point for 2027 Journeys
For any surrogacy journey involving a potential transfer in 2027, the fall enrollment period becomes particularly important.
- Review the 2027 policy, not merely the current policy. Carriers can revise Evidence of Coverage documents, reimbursement provisions, exclusions, networks, and cost sharing from one plan year to the next. A policy considered acceptable in 2026 should not automatically be assumed to remain appropriate in 2027.
- Confirm the obstetrician and delivery hospital. Provider networks can change annually. Confirm that the anticipated obstetrician and delivery facility will remain in network under the 2027 plan.
- Map the pregnancy across plan years. A transfer during the middle of 2027 may result in a 2028 delivery. That can mean a new deductible, a new out of pocket maximum, and potentially another Evidence of Coverage with different terms. The escrow analysis should anticipate that possibility.
- Do not overlook employer enrollment. AB 2066 would not have solved the employer plan issue. Employer open enrollment operates according to the employer’s calendar and may close considerably earlier than Covered California. A surrogate relying on her own or a spouse’s employer plan should obtain the actual enrollment dates rather than assuming the California individual market deadline applies.
The larger point is timing. Once pregnancy begins, the universe of insurance options narrows significantly.
Could Pregnancy Become a Qualifying Event Later?
Possibly.
AB 2066 received unanimous floor support before the Governor’s veto, suggesting that the underlying policy issue may return in a future legislative session. California will also have a new governor beginning in 2027, which could change how similar legislation is evaluated.
For agencies and intended parents planning current journeys, however, that possibility should not affect present decision making.
Plan for the rules that exist now.
For 2027, pregnancy itself does not create a special enrollment period in California.
Open Enrollment Deadlines for 2027 Coverage
For ease of planning, the major enrollment windows are as follows.
Covered California
Open enrollment runs from November 1, 2026 through January 31, 2027.
To have individual coverage begin January 1, 2027, enrollment should be completed by December 31, 2026 and the required first premium must be paid.
Individuals enrolling during January generally receive coverage beginning February 1, 2027.
For California surrogacy journeys requiring individual coverage at the beginning of the year, December 31 is therefore the practical deadline that matters most.
HealthCare.gov States
For surrogates living in states that use HealthCare.gov, open enrollment runs from November 1, 2026 through January 15, 2027.
Enrollment generally must be completed by December 15, 2026 for coverage beginning January 1.
Enrollment completed from December 16 through January 15 generally results in coverage beginning February 1, 2027.
Agencies working with surrogates in multiple states should not use California’s enrollment calendar for every journey.
Employer Group Coverage
Employer open enrollment dates are established by each employer and can vary considerably.
Many employers conduct enrollment during the fall, and some windows close in November or even earlier. Surrogates relying on their own employer plan or a spouse’s plan should confirm the actual dates directly with the employer or benefits administrator.
Pregnancy itself generally does not create a new enrollment opportunity under the employer plan simply because the existing coverage is undesirable for a surrogacy journey.
Special Enrollment Following a Qualifying Event
Special enrollment remains available throughout the year when an individual experiences an eligible qualifying event.
The enrollment period is commonly 60 days from the qualifying event, depending upon the type of coverage and event involved.
Examples may include loss of qualifying health coverage, marriage, birth, adoption, or a qualifying move.
Following the veto of AB 2066, pregnancy by itself is not a qualifying enrollment event in California.
The Bottom Line
For any gestational surrogate who may undergo transfer during 2027, health coverage should be reviewed now and, where necessary, changed during the applicable open enrollment period.
Attorneys can incorporate that review into the matching and contract process. Agencies can identify every journey expected to extend into 2027. Insurance professionals can review the actual plan documents, networks, reimbursement provisions, and anticipated cost exposure before transfer. Intended parents can then make informed decisions about insurance, specialty coverage, escrow funding, and potential lien exposure while meaningful options are still available.
Waiting until pregnancy is confirmed may be too late.
AB 2066 would have created another pathway. The Governor’s veto means that pathway will not be available for 2027.
The planning responsibility therefore remains where it was before the bill was introduced: before transfer, before pregnancy, and before the insurance options narrow.
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