OBJECTIVES: Macrovascular disease remains a common and costly comorbidity in patients with diabetes. The purpose of this study was to examine the marginal impact of macrovascular comorbidities on direct and indirect costs associated with patients with diabetes in the United States. METHODS: Using the pooled Medical Expenditure Panel Survey (MEPS) 2003 and 2005 data, a nationally representative adult sample (age>=18) was included in the study. Direct cost was measured by the total health care expenditure. Indirect cost was calculated from the lost productivity from missed work days and additional bed days due to illness/injury based on the 2005 average national hourly wage. The direct costs of both 2003 and 2005 data were adjusted to 2005 dollars. Given the heavily right-skewed distribution of the cost data, GLM with log-link function and gamma variance was used to identify the relationship between macrovascular conditions and costs after controlling for age, sex, race, ethnicity, education, income, smoking status, health insurance, and number of other comorbid categories. Negative binomial models were applied to analyze the outcomes of missed work days and bed days. All statistics were adjusted using the proper sampling weight from the MEPS. RESULTS: The average annual health care expense for patients with diabetes was $10,909. The average annual missed work days and additional bed days due to illness/injury for patients with diabetes were 6.3 and 14.8, respectively, equivalent to $2366 in total. Compared to diabetes patients without macrovascular comorbidities (N=3132), those with macrovascular comorbidities (N=762) had statistically significant higher annual health care expenses ($3587, p<0.001), more missed work days (4.05, p<0.01) and more bed days (7.15, p<0.001). The marginal lost productivity cost was $1257 annually. CONCLUSIONS: Macrovascular comorbidities in patients with diabetes result in increased direct and indirect costs.