News & Commentary

Premature Births Cost Insurers Up to $14 Billion Annually

Costs rung up in neonatal intensive care units have always been a drain for employer-sponsored health insurance. A new study in Pediatrics narrows the problem down, saying that the sizable amount of money spent on preterm infants in 2013 was spent on those with birth defects.

Employer-sponsored health plan expenditures on infants during the first year of life, 2013
Number Average expenditure Aggregate expenditure Percentage of total expenditure
Preterm with major birth defects 893 $226,840 $202,568,433 10.2%
Preterm without major birth defects 12,401 $42,620 $528,533,100 26.7%
Nonpreterm with major birth defects 3,691 $63,939 $235,998,923 11.9%
Nonpreterm without major birth defects 156,532 $6,450 $1,009,562,526 50.9%
Source: Grosse SD et al., Pediatrics, October 2017. Data are from Truven Health Analytics MarketScan Commercial Research Database.

“Infants born with serious birth defects incur much higher costs if they are also born preterm,” the study notes.

Infants with major birth defects accounted for 5.8% of preterm births but 24.5% of the costs incurred during infancy, the study found. The average expenditure for preterm infants with major birth defects was $226,840, compared with $42,620 for those born preterm without major birth defects.

The researchers conducted their study using a Truven database that includes a nationwide sample of claims and other data from employer-sponsored health plans. Extrapolating from the Truven data, they calculated that in 2013, employer-sponsored health plans paid between $6 billion and $14 billion for care associated with preterm births.

The cost of preterm infants may be higher for employer-sponsored plans, noted the team of researchers from the CDC and the University of Utah. Previous research has shown that Medicaid programs pay a third of what employer-sponsored plans do for preterm and low-birthweight infants.

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