Insomnia affects up to 40% of the general population yearly and is a significant cause of morbidity and mortality. The direct and indirect costs of insomnia place a tremendous economic burden on society and employers. In addition to the cost of medical treatment and drugs, measurable costs of insomnia include reduced productivity, increased absenteeism, accidents, and hospitalization, as well as medical costs due to increased morbidity and mortality, depression due to insomnia, and increased alcohol consumption. This article reviews the literature on the economic costs and effects associated with insomnia. Based on the data reviewed, a conservative estimate of the total annual cost of insomnia was calculated at $92.5 to $107.5 billion. Early recognition and treatment of insomnia can reduce the costs associated with the condition, as well as possibly prevent other illnesses.