OBJECTIVES: This retrospective study assessed the costs to treat community-acquired pneumonia (CAP) episodes by risk, age, and hospitalization in US adults aged ≥50. METHODS: A multi-payer administrative claims database containing over 2 million lives aged≥50 (800,000+ for aged≥65) was used to identify CAP episodes between July 2006 and June 2007.  An episode of pneumonia was defined as the period between the first and last pneumonia ICD-9 code with a chest x-ray claim. Episodes were also required to have a pre-post episode period free of pneumonia claims of at least 90 days.  Patients who were hospitalized or institutionalized in the 2 weeks prior to the start of the episode were excluded.  Episode costs included all-cause medical and pharmacy costs.   Results were stratified by age, risk (high: immunocompromised; moderate: immunocompetent with chronic medical condition; low: immunocompetent without chronic medical condition), and whether or not an episode included hospitalization. RESULTS: There were 21,086 CAP episodes among individuals aged ≥50 with 29% resulting in hospitalization.  Among those who were hospitalized, 48%, 37%, and 15% were from the low, moderate, and high risk groups, respectively.  The mean cost of a hospitalized CAP episode for the low, moderate, and high risk groups was $14,233, $19,470, and $ 27,032, respectively.  For ages 50-64 years old, the mean cost of a hospitalized episode was $16,606 compared with $18,493 for age≥65 years old.  Costs of outpatient CAP episodes were substantially lower with a mean of $1047, $1241, and $2055 for low, moderate, and high risk groups, respectively. CONCLUSIONS: The cost to treat CAP which requires hospitalization is high regardless of risk category or age.  Almost half of the hospitalized CAP patients do not appear to have traditional risk factors for pneumonia suggesting the need for better treatment and prevention strategies.