Neonatal Intensive Care Unit (NICU) stays can be a stressful and costly experience for families with newborns requiring specialized care. While medical insurance can help cover most costs, families may still face considerable out-of-pocket expenses.
Parents should understand how their insurance plan works and contact the issuing company immediately to add their infants to the coverage.
Many factors determine NICU charges before insurance pays: gestational age at birth, length of stay, specialized care required, and location.
Meanwhile, your health insurance plan’s cost-sharing features and non-medical expenses determine parents’ ultimate responsibility. Financial assistance might narrow any gaps.
NICU Financial Assistance
Families with babies in the NICU may face significant monetary burdens, even with insurance coverage. Fortunately, government programs and non-profit organizations offer financial assistance and support.
Government Programs
Supplemental Security Income (SSI) is the primary government assistance program helping parents cope with the NICU costs that insurance does not cover. SSI provides a monthly benefit check for those eligible.
But do not overlook other opportunities.
Government financial assistance for NICU parents is more extensive when you project into the future. Lost income is an unfortunate reality with one silver lining: many benefit programs base eligibility on forecasted earnings and household size.
- Childcare Assistance Programs
- Women Infants & Children (WIC)
- Supplemental Nutrition Assistance
- Temporary Assistance for Needy Families (TANF)
- Section 8 Housing Vouchers
Non-Profit Organizations
National and regional non-profit organizations, too numerous to mention, might offer financial assistance to offset NICU costs after insurance pays. However, the most notable charities provide information and moral support as the demand outstrips the supply of donor dollars.
March of Dimes
The March of Dimes is a non-profit organization that provides support and resources to families with premature or sick babies. Their NICU Family Support (NFS) program offers family education and staff training on family-centered care.
Contact the March of Dimes for more information about NFS and its availability.
Ronald McDonald House
Ronald McDonald House Charities (RMHC) is a non-profit organization that provides temporary housing to families with sick or injured children. Many RMHC locations are located near hospitals with NICU units and offer free or low-cost lodging to families who need to travel for their baby’s care.
Find a local RMHC chapter near your hospital to inquire about openings.
Unreimbursed NICU Costs
Health insurance should cover most of the costs when a baby is born prematurely and requires a stay in the Neonatal Intensive Care Unit (NICU). But every plan leaves unreimbursed expenses.
The best pregnancy insurance minimizes unreimbursed costs for NICU stays via the deductible, copayment, co-insurance, maximum out-of-pocket, and network coverage.
Deductibles
Deductibles refer to the amount a patient must pay before their insurance starts covering any costs in a plan year. Annual deductibles vary, ranging from a few hundred to several thousand dollars, with separate thresholds.
- Individual: What each covered person must pay first
- Family: The maximum a household pays in one year
For example, parents with a $1,500 individual and $3,000 family deductible might incur varying NICU bills based on their experience.
- $3,000: Mother and baby must satisfy the individual deductible
- $4,500: One infant stay spans two plan years (December and January)
- $6,000: Twin or triplet NICU stays span two plan years
Copayments
Copayments refer to a fixed amount parents pay each time the NICU provides a specific medical service. Most plans impose a flat daily fee, which can add up for lengthy stays.
For example, a family with a $20 copay might experience these charges.
- $600: One-month confinement
- $1,200: Two-month confinement
- $2,400: Twins confined for two months
Co-Insurance
Co-insurance refers to the percentage of the medical costs a patient is responsible for paying after meeting their annual deductible. Some plans may cover 100% of the expenses after meeting the deductible. In contrast, others may require the parents to pay a percentage.
For example, a family would owe $1,000 on a $5,000 NICU bill paid by the medical insurance if their plan has 20% co-insurance.
Out-of-Pocket Max
The annual maximum out-of-pocket (MOOP) limits what the parents pay themselves for medical services covered by health insurance in one year. Most plans will have an individual and family MOOP restraining their NICU expenses.
For instance, a couple with a $7,500 individual and a $15,000 family MOOP could face different limits based on timing and number of infants.
- $7,500: one infant hospitalized in one year
- $15,000: Twin or triplet preemies confined in one year
- $30,000: Twin or triplet confinement spanning two years
Network Coverage
NICU costs with PPO or HMO insurance coverage sometimes balloon when out-of-network specialists care for your premature or seriously sick infant. Parents utilizing in-network hospitals sometimes face surprise balance bills that do not count towards the MOOP.
Learning about the No Surprises Act might protect your finances if an out-of-network neonatologist, respiratory therapist, neonatal nurse practitioner, or dietitian sends you a balance bill.
Non-Medical NICU Costs
While health insurance can cover medical expenses related to a NICU stay, there are non-medical costs that families may incur during this time. These charges add financial stress for families already dealing with a difficult situation.
Lost Income
Medical insurance does not replace the lost income often connected to a lengthy NICU stay. Many mothers take unpaid maternity leave when their babies are healthy, and circumstances do not improve when their infants begin life in an incubator.
U.S. maternity and paternity leave laws are inconsistent. Some parents enjoy paid time off, while most do not. Meanwhile, the federal FMLA provides unpaid job protections for about half of workers for twelve weeks.
Travel Expenses
Health insurance does not cover travel costs associated with an extended NICU stay. Parents frequently must reach into their pockets to pay for these unexpected expenses.
- Parking at the hospital daily
- Gas and tools traveling to and from the hospital
- Purchase meals instead of preparing food at home
- Staying in nearby hotels
Childcare
Medical insurance does not pay for childcare associated with an extended NICU stay. If parents have other kids at home, they may need to arrange babysitting while they are at the hospital with their infant.
To help offset these costs, some hospitals have programs to provide childcare services for families with an infant in the NICU. Additionally, community resources may be available, such as local non-profits or religious organizations that might help.
