Background: The aim of this study was to explore the cost-benefit-ratio of pediatric cochlear implantation for congenitally deaf and prelingually deafened children compared to children with hearing aids. The payers' perspective was chosen as this is the most relevant for cost discussions. The study should verify the hypothesis that educational and associated full costs increase with the age at implantation and that these can be below costs for children with hearing aids. Methods: Children implanted at different ages (group 1: 0 - 1.9 yr., group 2: 2 - 3.9 yr., group 3: 4 - 6.9 yr.) were compared with deaf children using hearing aids (group 4). Payers were sick funds and public authorities, the first paying for medical and indirect costs, the latter paying for education. Educational settings were used as measure for benefit. All costs related to the hearing deficiency were included up to the age of 16 years (end of primary education) based on 1999 costs. Results: Discounted medical and indirect costs for a pediatric cochlear implant user varied between DM 112,000 ($ 53,300) and DM 91,000 ($ 43,300) depending on the age at implantation. Costs for a hearing aid user added up to DM 36,000 ($ 17,100). These costs were paid by the sick funds. Costs for education varied between DM 159,000 ($ 75,700) for group 1 and DM 257,000 ($ 122,400) for group 3 compared to DM 277,000 ($ 131,900) for hearing aid users. These differences are mainly based on the use of mainstream schools. Total costs for sick funds and public authorities ad up to DM 271,000 ($ 129,000), DM 334,000 ($ 159,000) and DM 348,000 ($ 165,700), respectively, for the three age groups of implanted children compared to DM 313,000 ($148,600) for hearing aid users. Conclusion: This study supports the view that pediatric cochlear implantation provides positive cost-benefit ratios compared to hearing aid users depending on the age at implantation. From a societal/payer perspective implantation of prelingually deafened children is especially recommended for children under the age of 2 years. Implantation between ages 2 and 3,9 can be recommended from an educational perspective. Implantation at ages >7 years must be based on individual decisions considering psychosocial environment, speech and language status and type of communication.