OBJECTIVES: To examine the overall incremental cost and survival benefit associated with the receipt of second line chemotherapy/biologics (Tx2) among elderly Medicare metastatic colon cancer (mCC) patients who had received first line chemotherapy/biologics treatment (Tx1). METHODS: Elderly (66+) SEER-Medicare patients diagnosed with mCC in 2003-2007 were identified and followed until death or 12/31/09. The analysis was restricted to patients who received any chemotherapy/biologics treatment. Cox regression and partitioned least squares regression were utilized to obtain the incremental survival benefit and the overall incremental cost associated with the receipt of Tx2 within a five-year period, respectively. The regressions controlled for patient demographic and clinical characteristics including cancer related measures, Charlson comorbidity index and proxy for poor performance status. Bootstrapping was used to produce 95% confidence intervals (CI). RESULTS: Of the 3,266 elderly Medicare mCC who received Tx1, 2,744 (84%) died within the observation period; 1,440 (44%) received Tx2; 274(8%) received subsequent treatments. The incremental survival benefit associated with the receipt of Tx2 was 0.631 years (CI: 0.517 − 0.761), and the associated overall incremental cost was $107,027 (CI: 93,401 − 120,887). The incremental cost-effectiveness ratio for Tx2 was $169,722 per life year gained (CI: 137,139 − 208,134). CONCLUSIONS: The estimated survival benefit of receiving second line chemotherapy/biologics treatment ranges from 6 to 9 months, which is consistent with evidence from clinical trials. This improved survival was associated with costs that are slightly above $100,000.