OBJECTIVES: To estimate annual hospitalization rate and associated direct costs for Medicare beneficiaries with heart failure (HF). METHODS: A 5% (n=3,493,434) national sample of Medicare beneficiaries was used to identify individuals with first observed primary inpatient claim for HF (ICD-9: 428.xx) between 07/01/2005 and 12/31/2011. Patients having HF diagnoses in the 6 months prior to first observed claim were excluded. Patient demographics, use of HF medications and medical devices were reported. Annual hospitalization rate and associated total costs (the Centers for Medicare and Medicaid Services payment, as well as patient out-of-pocket costs) were calculated. In order to account for varying lengths of follow-up, a per patient-year estimation method was used to calculate the cumulative rate of hospitalizations. Cumulative hospitalization rates and associated costs were estimated for all-cause hospitalizations, cardiovascular (CV) hospitalizations and HF-related hospitalizations.  RESULTS: A total of 63,678 patients met the study criteria. Mean age was 82 years and 61% of patients were women. Among patients with part D coverage (n=35,788), 64.6% of patients used β blockers. On average, patients were hospitalized 2.19 times per patient-year for all-cause. Patients were hospitalized on average 1.02 times per patient-year for HF- and 1.30 times per patient-year for CV-related hospitalization. The costs associated with first observed all-cause hospitalization were $14,500, for CV-related hospitalization was $17,300 and for HF-related hospitalization were approximately $16,000.  CONCLUSIONS: Patients with HF who have been hospitalized had frequent subsequent hospitalizations. On an average, these individuals experienced 2 all-cause hospitalizations per year, one of them being due to worsening of HF. These hospitalizations were costly, with costs ranging from $14,000 to $17,300 per episode.