Complications of Type 1 diabetes mellitus (DM) increase costs to the healthcare provider. Age is correlated with complications as well as costs. OBJECTIVE: To estimate diabetes-related costs due to complications separately from age. METHODS: Members with Type 1 DM were selected by ETG? group from PharMetric s Integrated Outcomes database during 1997. Charges to the member s MCO for ED, pharmacy, in- and out-patient services were tallied over CY 1997. Members were classified: (1) as having 0,1, or >1 complications (nephropathy, retinopathy, neuropathy, or CAD), and (2) by age: <18, 18-44, 45-64, or 65+. A regression of age and gender on ln(charges) was compared to a regression of age, gender, and complications. RESULTS: Over 41,000 members were included in the study, about half male and female. About 2/3 were 45 or older. Approximately 21,000 (52%) had 0 comorbidities, 12,000 (29%) had 1, and 7800 (19%) had >1; 92% of those <18 had 0 comorbidities; 65% of those 18-44 did; 47% of those 45-64 did; 34% of those 65+ did. Similarly, 0.3% of those <18 had >1 comorbidity; 10% of those 18-44s, 21% of those 45-64s, and 30% of those 65+. The mean annual cost was $2,200; with 0 comorbidities: $1,200; with 1: $2,000; with >1: $5,200. The R2 for the regression without complications 0.0085, (0.85% of log charges explained by age and gender). The R2 with complications was 0.1121(11% explained by age, gender and complications). This increase was highly significant (p<0.001). CONCLUSIONS: Costs increased 13 times more due to complications than age on a log scale. Substantial savings may be realized by MCOs who manage their members diabetes well.