Does Health Insurance Cover the Cost of a Stay in the NICU?

Published on April 30, 2024, by Law Office of Matthew L. Sharp

Health Care Litigation

Does Health Insurance Cover the Cost of a Stay in the NICU?

The neonatal intensive care unit (NICU) is a crucial facility that provides specialized care for newborns who are premature, have low birth weights, or face other medical challenges.

While the NICU serves as a lifesaving haven for these vulnerable infants, the financial burden it imposes on families can be overwhelming. Many parents wonder whether their health insurance will cover the substantial costs associated with a NICU stay.

According to the American Medical Association (AMA), “Daily NICU costs [typically] exceed $3,500 per infant, and it is not unusual for costs to top $1 million for a prolonged stay.”

In this post, we’ll delve into the complexities of whether health insurance covers the cost of a stay in the NICU, exploring what is typically covered, potential out-of-pocket expenses, and strategies for navigating the insurance landscape.

The Neonatal Intensive Care Unit

Overall, the NICU provides essential medical care and support for newborns facing various health challenges, ensuring they receive the specialized attention and treatment needed for optimal health and development.

Babies are placed in the neonatal intensive care unit (NICU) for various reasons, some of which include:

  • Premature birth: Babies born before 37 weeks of gestation may require NICU care due to underdeveloped organs and physiological systems.
  • Low birth weight: Infants born weighing less than 5.5 pounds (2.5 kilograms) may need specialized care in the NICU to address nutritional needs and monitor growth.
  • Respiratory distress: Newborns experiencing difficulty breathing, such as respiratory distress syndrome or meconium aspiration, may require respiratory support and monitoring in the NICU.
  • Infections: Babies born with infections, such as sepsis or pneumonia, may need antibiotics and close monitoring in the NICU to ensure proper treatment and recovery.
  • Birth defects: Infants with congenital anomalies, such as heart defects, neural tube defects, or gastrointestinal abnormalities, may require surgical intervention or specialized care in the NICU.
  • Hypoglycemia: Low blood sugar levels (hypoglycemia) can occur in newborns for various reasons, including prematurity, maternal diabetes, or other metabolic disorders, necessitating monitoring and treatment in the NICU.
  • Birth trauma: Newborns experiencing birth trauma, such as asphyxia or traumatic injuries during delivery, may need immediate medical attention and specialized care in the NICU.
  • Maternal health issues: Babies born to mothers with certain health conditions, such as gestational diabetes, hypertension, or substance abuse disorders, may require NICU care due to potential complications or health risks.

Health Insurance Coverage

Firstly, it’s important to understand that health insurance coverage for NICU stays can vary significantly depending on several factors, including the type of insurance plan, the specific policy provisions, and the infant’s medical condition.

Generally, most health insurance plans provide some level of coverage for NICU care, as it is considered a medically necessary service. However, the extent of coverage and the associated costs can vary widely.

In many cases, health insurance plans cover the majority of the expenses related to a NICU stay, including medical treatments, medications, monitoring equipment, and the services of healthcare professionals such as neonatologists, nurses, and respiratory therapists.

Additionally, certain diagnostic tests, procedures, and therapies may also be covered under the policy.

Contact a representative from your health insurance company and ask about your NICU coverage.


  • Does my plan cover all of my infant’s expenses in the NICU?
  • What, if any, services do my plan NOT pay for?
  • What are the payment expectations for the remaining costs?

Be sure to take detailed notes during your conversation, including the date of your calls and the names of anyone you spoke to.

Out-of-Pocket Expenses

Despite this coverage, parents need to be aware that they may still incur significant out-of-pocket expenses during their infant’s NICU stay.

These expenses can include deductibles, copayments, coinsurance, and any costs associated with services or treatments that are not covered by their insurance plan. Additionally, some health insurance plans may have limitations or restrictions on certain types of NICU care, such as experimental treatments or specialized equipment, which could result in additional expenses for the family.

To mitigate the financial impact of a NICU stay, parents should take proactive steps to understand their health insurance coverage and explore any available resources or assistance programs.

This may involve reviewing their insurance policy documents carefully, contacting their insurance provider to clarify coverage details, and seeking guidance from a healthcare advocate or financial counselor if needed.

Financial Assistance

Some hospitals have financial assistance programs or social workers who can help families navigate the financial aspects of a NICU stay and identify potential sources of financial support.

In some cases, families may also be eligible for government assistance programs like Medicaid or the Supplemental Security Income Program (also called SSI) offered by Social Security, as infants requiring NICU stays may qualify for SSI based on their medical needs and their family’s financial resources.

A number of nonprofit organizations offer family support and financial assistance to families with infants in the NICU.

These programs may offer assistance with medical expenses, transportation costs, lodging, and other related expenses, helping to alleviate some of the financial strain associated with a NICU stay.

Ultimately, while health insurance can help offset the costs of a NICU stay, parents need to be prepared for potential out-of-pocket expenses and explore all available resources for financial assistance.

Health insurance coverage for NICU stays can vary depending on numerous factors, and while many expenses may be covered under a typical policy, families may still face significant out-of-pocket costs.

By educating themselves about their insurance coverage, exploring available resources and assistance programs, and advocating for their child’s medical needs, parents can better manage the financial challenges associated with a NICU stay.

Then, they can focus on what matters most—the health and well-being of their newborn.

Our law firm, The Law Office of Matthew L. Sharp, is here for you if you’ve been wrongfully informed your health insurance doesn’t cover a NICU stay or if there are any other issues with your insurer. Consultations with our attorneys are free, so reach out for one now.