A large-scale pandemic could cause severe health, social, and economic impacts. The recent 2009 H1N1 pandemic confirmed the need for mitigation strategies that are cost-effective and easy to implement. Typically, in the early stages of a pandemic, as seen with pandemic (H1N1) 2009, vaccines and antivirals may be limited or non-existent, resulting in the need for non-pharmaceutical strategies to reduce the spread of disease and the economic impact. We construct and analyze a mathematical model for a population comprised of three different age groups and assume that some individuals wear facemasks. We then quantify the impact facemasks could have had on the spread of pandemic (H1N1) 2009 and examine their cost effectiveness. Our analyses show that an unmitigated pandemic could result in losses of nearly $832 billion in the United States during the length of the pandemic. Based on present value of future earnings, hospital costs, and lost income estimates due to illness, this study estimates that the use of facemasks by 10%, 25%, and 50% of the population could reduce economic losses by $478 billion, $570 billion, and $573 billion, respectively. The results show that facemasks can significantly reduce the number of influenza cases as well as the economic losses due to a pandemic.