Two Wisconsin surrogate mothers - with help from the state Commissioner of Insurance and state Supreme Court - have made Wisconsin the most surrogacy-friendly state in the nation when it comes to health insurance.

A 2010 Supreme Court ruling, handed down after the two women were denied benefits, makes it illegal for most health insurers to refuse to cover a surrogate's pregnancy. That means infertile couples who want to be parents can save thousands of dollars in medical costs by working with Wisconsin surrogates.

"The Supreme Court has said, essentially, that if you are an insurance policy governed by Wisconsin law and you provide maternity coverage, you can't exclude coverage for somebody based on the circumstances of conception," said attorney Lynn Bodi, who co-owns a surrogacy agency in Madison.

Attorneys around the country are very aware of the Wisconsin decision, the only one of its kind in the nation so far, Bodi said.

"They are interested in trying to use it to explain to their courts and legislatures that this makes sense," she said.

The case began after Janesville-based MercyCare Insurance Company and MercyCare HMO denied coverage to the two women. They had served as gestational surrogates, meaning they were not genetically related to the children they carried.

The first delivered a baby in 2003, incurring $18,511 in medical bills. The second delivered twins in 2004. Her bills totaled $16,745.

Their health plans said "surrogate mother services" were not covered.

The Wisconsin Commissioner of Insurance reviewed the situation after one of the women complained it was discriminatory to exclude her from coverage based on how conception occurred.

Jorge Gomez, then the state insurance commissioner, agreed, calling the decision to become pregnant "intensely personal."

"To give an insurer license to inquire into why a woman is pregnant or whether she intends to keep her baby would be improper," he wrote.

MercyCare challenged the decision and won in Circuit Court. Gomez's office appealed. Rather than issuing a decision, the state Court of Appeals sent the case to the Supreme Court, which ruled against MercyCare.

"An insurer may not make routine maternity services that are generally covered under the policy unavailable to a specific subgroup of insureds, surrogate mothers, based solely on the insured's reasons for becoming pregnant or the method used to achieve pregnancy," the decision says.

Some health plans, including those regulated by the federal government rather than by the state and those that are self-funded, are not covered by the ruling. It does not require insurers to cover reproductive technology, such as in vitro fertilization, only the costs of prenatal care and delivery.

Fears that the case would damage the industry have not materialized, according to Phil Dougherty, senior executive officer at the Wisconsin Association of Health Plans.

"It's not anything that has been on our radar screen," he said. "No one has raised that specific issue as an industry issue to be addressed."