Objective: To evaluate the impact of psoriasis (PsO) on health care costs in the first year after diagnosis. Methods: A retrospective study of the PharMetrics database, compiled from managed care plans throughout the United States, from January 1, 2000 through December 31, 2006 was conducted. Patients between the ages of 18 to 80 years, who had a minimum of 12 months of continuous enrollment before and after their index diagnosis with PsO, were included. The index diagnosis date was derived from the first claim for PsO during the study period. Health care costs in the years prior to and subsequent to the diagnosis of PsO were compared. Wilcoxon Signed-Rank Tests were used to test for significant differences between pre- and post-index periods. The cost of adverse events could not be identified separately in this study. Results: The study cohort included 48,068 patients; 52.3% were females and the mean age was 46.3 years. The total healthcare costs increased by 32.73% ($4,834.22 to $6,416.52). The largest cost increase was for inpatient care (31.8%), followed by pharmacy costs (25.6%), physician visits (19.7%), out-patient care (11.1%), other services (8.9%), emergency room (1.5%) and laboratory services (1.4%). About 75% of the cost increase was for non-pharmacy related services. All the changes in costs were statistically significant (p<0.001) after the adjustment for inflation. Conclusion: This study indicates that following a diagnosis of PsO, health care costs in the first year after such a diagnosis increases significantly. The greatest increase in costs was for inpatient care, and it is notable that 75% of the increased costs were for non-pharmacy related services. Additional studies are needed to further explore the reasons for this large increase in the cost of treating patients in the first year after a diagnosis of PsO.