Managing Costs for NICU Stay

The neonatal intensive care unit (NICU) is designed to provide round-the-clock healthcare for babies who are born prematurely or with life-threatening health conditions.

A NICU stay can be emotional and stressful for parents and there may be financial aftershocks once medical bills begin arriving. Newborn intensive care costs can be significantly higher than standard newborn care costs. While your insurance should pay for some of your medical expenses, it may not cover everything.

Average Cost of a NICU Stay

The neonatal intensive care unit provides specialized care to newborns who are born early or are sick. While in the NICU, your baby might be seen by a number of health care staff, including a neonatologist, respiratory therapist, neonatal nurse practitioner, and dietitian. In general, your baby will receive more intensive care and attention during their NICU stay than they would with a typical hospital stay.

From a cost perspective, that means you’ll likely pay more for neonatal intensive care than you would for standard newborn care. According to a Michigan Medicine study of nearly 400,000 deliveries that required hospitalization from 2016 to 2019, the average NICU bill was $4,969. In 9% of cases where neonatal intensive care was needed, the bill exceeded $10,000.

The amount you might pay for NICU care can depend on several factors, including:

• Why your baby was transferred to the neonatal unit
• How long they remain in the NICU
• The level of care they receive
• The hospital where the NICU is located

For moderate to late preterm babies, the typical NICU stay is about 17 days. Some newborns may go home earlier from the NICU, while others may stay for several weeks or even months, depending on the extent of their care needs. Generally, the longer the stay, the more you can expect a NICU visit to cost.

Does Insurance Cover NICU Costs?

Whether your health insurance will cover some or all of the costs of neonatal intensive care depends on your policy. If your baby is admitted to the NICU, it’s important to contact your health insurance company to ask about your coverage. Specifically, you can ask these questions:

• Does my plan pay for neonatal intensive care?
• What costs are included or excluded from coverage?
• What part of the medical bills am I responsible for?

You’ll also need to consider how your financial obligation may be affected if your child is covered by more than one health insurance plan. For example, if you’re married and you and your spouse both have health insurance through your employer, you’ll need to be aware of whether the coordination of benefits rule applies.

Coordination of benefits is a provision that’s included in most healthcare plans and provides up to 100% coverage for medical services. Under this rule, your plan is primarily designed to cover you while your spouse’s plan primarily covers them. When you have children, your insurance companies can use the birthday rule to decide which policy should cover the child. The child’s primary plan would be the one that belongs to the parent whose birthday comes first in the year.

That means that if your birthday comes first, your child will be covered by your plan first, even if your spouse’s plan offers more generous coverage. So you’d need to submit NICU bills to your plan as the primary insurer before submitting any claims to secondary insurance, potentially increasing the amount you have to pay out-of-pocket.

How to Get Help With NICU Costs

If your health insurance doesn’t cover newborn intensive care or you don’t have health insurance, there are a few things you might be able to do to lighten some of the load financially. You can start by contacting the hospital’s NICU case manager or social worker. They should be able to discuss possible options for covering NICU expenses, including applying for Medicaid or Supplemental Security Income (SSI) benefits.

Newborns born to mothers who already have Medicaid are automatically covered. In cases where the mother does not qualify for Medicaid, the baby may still be eligible. Medicaid eligibility is based on household size, income, and financial resources. You can apply for Medicaid for your newborn or for yourself through your local Department of Social Services office.

Supplemental Security Income can cover babies born with certain conditions who require NICU care. While SSI does not directly cover healthcare costs, it can provide families with monthly benefit payments that they can use to pay for medical care or other expenses related to their baby’s NICU stay. You’ll need to apply for SSI benefits through the Social Security Administration (SSA).

If you’re not eligible for Medicaid or SSI benefits, you could talk to the hospital about other options. For example, you may be eligible for charity assistance based on your income and financial resources. Or the hospital may work with you to negotiate a discounted payment plan. You can contact the hospital’s billing department to discuss possible solutions to fit your situation.

Bottom Line

Having your baby spend the first days or weeks of its life in neonatal intensive care can be strenuous enough, without having to worry about staggering medical bills. Understanding what’s likely to be covered by your health insurance and what options you have for getting financial assistance can help reduce your stress with financial issues.