OBJECTIVES: Compare direct costs of medical care before and after heart failure (HF) hospitalization in a Medicare population. METHODS: A 5% (n=3,493,434) national sample of Medicare beneficiaries for the years 2006-2012 was used to identify individuals with at least 65 years of age at the date of hospital admission for HF, enrolled in Medicare Parts A and B and not enrolled in a Medicare Advantage plan. Total costs were summed (in constant 2012 dollars) for all services utilized by the hospitalized beneficiary every month during observation the period. The total costs for each month before, after and during the month of HF hospitalization were plotted. Costs of an HF episode were calculated as difference in total reimbursements in the six months during and after the month of hospitalization and the six months preceding the event. The incremental analysis allows individuals to serve as their own controls. RESULTS: There were 63,678 eligible episodes of HF hospitalizations. In the six months prior to the month of hospitalization total costs were $14,212 and in the six months following discharge, total costs were $24,645. The cost (total costs for all services utilized) during the month of hospitalization was $14,967. CONCLUSIONS: The cost of care in the six months following a HF hospital discharge was more than $10,000 higher than those in 6 months prior to the hospitalization. Avoiding hospitalizations for patients with HF would be desirable not only because they are costly but also because the cost of care remains higher for at least six months following the hospitalization.