ABSTRACT Background The cost of medically attended RSV LRI (lower respiratory infection) is critical in determining the economic value of new RSV immunoprophylaxes. However, most studies have focused on intermittent RSV encounters, not the episode of care that captures the entirety of RSV illness. Methods We created age‐ and condition‐specific cohorts of children under 5 years of age using MarketScan® data (2015–2019). We contrasted aggregating healthcare costs over RSV‐LRTI episodes to ascertaining costs based on RSV‐specific encounters only. Economic burden was estimated by multiplying costs per encounter or per episode by their respective incidence rates. Results Average cost was higher per episode than per encounter regardless of settings (inpatient: $28,586 vs. $18,056 and outpatient/ED: $2099 vs. $407 for infants). Across ages, the economic burden was highest for infants and RSV‐LRTI requiring inpatient care, but the burden in outpatient/ED settings was disproportionately higher than costs due to higher incidence rates (for inpatient vs. outpatient episodes: $226,403 vs. $101,269; for inpatient vs. outpatient encounters: $151,878 vs. $38,819 per 1000 infant‐years). For high‐risk children, cost and burden were up to 3–10 times higher, respectively. Conclusions With a comprehensive stratification by settings and risk condition, the encounter‐ versus episode‐based estimates provide a robust range for policymakers' economic appraisal of new RSV immunoprophylaxes.