OBJECTIVES: To characterize Medicare patients with acute ischemic stroke (AIS) and describe healthcare resource utilization and associated direct costs during one-year pre-admission and follow-up period. METHODS: Medicare beneficiaries ages 65+ years with an incident AIS hospitalization in 2011 were identified from the 5% random Medicare Limited Data Set. Resources utilized and expenditures for hospitalizations, ICU stays, outpatient visits, rehabilitation, ER visits, and by types of services were measured during five phases: (1) pre-admission; (2) hospitalization to one-month; (3) 2- to 3-months; (4) 4- to 6-months; and (5) 7-months to 1-year. The differences in the mean annual costs pre- and post-AIS were compared. RESULTS: We identified 6,697 AIS patients (age 79±8.0), 614 (9.2%) who were readmitted within 30 days. Resource utilization and costs in all categories were highest during the first 30 days and decreased progressively during follow up. The average cost per patient during hospitalization to one-month period was $16,219. The average cost was $4,588 at 2- to 3-months; $4,650 at 4- to 6-months; and $7,426 at 7-months to 1-year period. The average annual cost in the year following AIS was $32,882 per patient. The three highest annual average cost drivers were diagnostic/lab services ($27,263), followed by inpatient hospitalization ($19,226), and pharmacy/IV therapy services ($9,484). Average cost per patient in all categories at 1-year post-AIS increased significantly from the pre-admission period. Diagnostic/lab services expenditures increased $20,225; pharmacy/IV therapy services increased $6,864; and outpatient visits increased $2,484; all p-values < 0.001. Compared to the overall AIS patients, the early readmitted patients experienced higher resource utilization and expenditures. CONCLUSIONS: Economic burden of Medicare AIS patients is substantial. Resource utilization and direct costs were highest during the first 30 days of AIS hospitalization and doubles in the first year. Costs significantly increased in the year following stroke compared to the pre-admission year.