BACKGROUND: In literature economic models of flu vaccination in elderly (65+) most often consider the target population as one homogeneous age-group evaluated during a one-year time-period (= one-year 65+group cohort model). Because the mortality rates in elderly steeply increase with age and the transition probabilities for specific health states are age-specific, this population should be evaluated as non-homogeneous and over a life-time with annual vaccinations. This study compares the cost results of flu vaccination between these two different modelling approaches. METHODS: Two models were developed to estimate the direct costs of annual flu vaccination compared with no vaccination: (1) a one-year 65+group cohort model, and (2) a life-time multi-age cohort model with target population and clinical pathways stratified in five age-cohorts (65-69y; 70-74y; 75-79y; 80-84y; 85+y) eligible for annual vaccination. Both models were populated with US specific data. Vaccination coverage and disease management was identical in both models. The decision tree included the following states: natural deaths, infected, and symptomatic states followed by GP visits, hospitalizations (pneumonia, influenza, stroke, myocardial infarction, and congestive heart failure), disease specific death rates, and recovery in nursing homes. Undiscounted costs per individual per year are compared for vaccinated and unvaccinated groups, using both approaches. RESULTS: The cost per individual per year is higher in the one-year 65+group cohort model versus the life-time multi-age cohort model (no vaccination: $205 versus $139; vaccination: $185 versus $113) as expected: considering additional age-cohorts with decreasing life expectancies in the multi-age cohort lowers the average cost per individual per year. Meanwhile, the selection of model type impacts the estimated incremental cost of vaccinated versus unvaccinated groups ($-20 versus $-26). CONCLUSIONS: In economic assessments a one-year 65+group cohort approach undervalues the impact of heterogeneity in elderly on the benefit of flu vaccination and therefore a life-time multi-age cohort is preferred.