While the variational phase-field model has been widely used in modeling fracturing in porous media, it poses a challenge when applying high confining pressures on a model because the relatively large deformation induced by the confining pressures might cause undesired crack nucleation when the strain decomposition scheme are used, which is not consistent with engineering observations. This study proposes a two-step strategy to incorporate in situ stresses into phase-field modeling of hydraulic fractures, addressing the limitations of previous approaches in capturing realistic fracture initiation and propagation under high confinement. A micromechanics-based hydromechanical phase-field model is presented first, and the proposed two-step strategy is investigated with different strain decomposition schemes: isotropic, volumetric–deviatoric, and no-tension models. Two numerical examples show that the two-step strategy effectively achieves a desired initial state with geostatic stresses and zero strain, allowing for accurate simulations even in the presence of complex natural fractures. The efficiency of the proposed two-step strategy for incorporating in situ stresses is highlighted, and the challenges associated with capturing stiffness recovery and shear fracture nucleation under high confinement using strain-based models are discussed.