I was a gestational carrier surrogate and in Massachusetts, it's perfectly legal and above-board. I am employed and my health insurance covered the costs of my pre-natal care and delivery. I was paid more than $20K for the surrogacy, which is the market rate here. As Jennifer H. mentioned below, the contracts are usually written so that you are paid over 10 months - one small payment when you start taking Lupron to suppress your cycle, a larger payment at the time of the transfer, and if the pregnancy takes, you get one payment per month of pregnancy and the final payment at delivery. If you end up carrying twins or higher-order multiples, contracts usually include additional compensation that gets added to the last few months (around $5K per extra baby is typical). There is extra compensation for doing procedures such as amnio, being on bed rest, or having a c-section. You would get a small clothing allowance, and things like parking for medical appointments is reimbursed. So when all that is rolled in, you can get paid a substantial amount of money and for tax purposes, it doesn't count as income or anything at all.
It was far and away the most extraordinary thing that I have ever done and the most meaningful experience that I have ever had, but that's outside of the compensation. Although I have always had easy pregnancies, carrying twins is no joke and is a very likely scenario with gestational carriers. For the first time in any pregnancy, I was put on bed rest and really had to rely heavily on support from my friends, neighbors, family and co-workers and that was hard to do. Although my kids were great with the situation and were happy that I was doing this, it was hard on them to have me out of commission for many months - to hear that I was too tired to play with them, or had to miss a hockey game because I couldn't drive too far, or that we had to eat what someone dropped off because I couldn't stand long enough to cook something they like for dinner. My husband was totally on board with this from a financial standpoint and because he really loved the couple we were doing this with (they were friends of friends) but it was really, really hard on him and he was definitely sick of everything by the end.
When we went on a final hospital tour before the birth (which was a scheduled induction) the nurse manager who handles GC births was teary with joy after meeting with the four of us. She kept saying that it was extraordinary to get to this point and see so much genuine love, warmth and support between the carrier and the intended parents and that most pre-birth meetings like this (they do several GC deliveries each year) are tense, cold and sometimes hostile. I guess in many arrangements, relationships that start off well can break down. We heard similar comments during and after the delivery too. That surprised me, but it's important to know that that can happen if you are matched with strangers instead of doing it for a friend.
There are many families who go through successful GC journeys who are, to put in plainly, in it primarily for the compensation. I didn't seek this out, but once I was asked, I realized that I had just been waiting to be asked and that this was something that I hoped would happen to me. The compensation was a bonus, but it came at the right time as we really needed a financial Hail Mary and this was it.
I think that if you got through the medical screening, and are fully aware of what you're getting into and get through the psych and social worker screenings that come later, it's worth considering. An experienced agency and legal team (which the intended parents pay for) will handle all of the legal issues. Just know that you will need a good support network and your husband must be 1000% on board. Even with a history of healthy, easy pregnancies, the shots you have to take will turn you into a raving lunatic. You have to get up at an ungodly hour and drive to a hospital to have your blood drawn, sometimes several times a week. You have to give yourself small shots in the abdomen daily for several weeks. When you get to the embryo transfer, you have to give yourself a GIANT progesterone shot in the hip every day and if the pregnancy takes, continue that for 10 weeks. You also have to take estrogen pills. If you carry twins, you have to have twice as many appointments as with a single pregnancy (so twice monthly and later, weekly) and have monthly ultrasounds, so there are way more appointments to go to.
Finally, the responsibility of carrying someone else's children is huge and at times, overwhelming. Things I felt free to do in my own pregnancies (have some feta cheese without asking the restaurant if it was pasteurized, have an iced tea with 10 whole mg of caffeine, eat deli meat now and again, have a Diet Coke, use a strong bathroom cleaner) I wouldn't consider doing with their babies. I was totally paranoid about pregnancy loss and kept waiting for something awful happen when with my own children, I was relatively cavalier. Knowing that if something happened, this was pretty much their only shot of having biological children because they couldn't afford to do this twice was at times terrifying. Once the babies were born, the most overwhelming sense that I felt was one of relief that I did my job and from here on out, their well-being was in the arms (literally) of their parents.
My GC babies turned 2 a few weeks ago and they are happy, healthy, wonderful little people who were born to two of the best parents I know. Their parents are the kind of people who you want to have children and it was a humbling experience, an honor, and a privilege to be part of a giant team of people (we tried to count once how many people made this happen and lost count at 100) who helped this couple become parents. All that said, I doubt I would to it again for any amount of money.