The most widely cited studies on the costs of allergic rhinitis predate the use of non-sedating antihistamines and inhaled corticosteroids. OBJECTIVE: Our objectives were to update U.S. estimates of the direct and indirect costs of allergic rhinitis and to estimate prescription medication expenditures by prescription drug coverage. METHODS: Data from the 1996 Medical Expenditure Panel Survey (MEPS) were used in a cross-sectional analysis of resource utilization and costs for allergic rhinitis. RESULTS: Approximately 6.5% (21 million) of the U.S. noninstitutionalized civilian population was estimated to experience allergic rhinitis during 1996, of which approximately 62% sought medical treatment (i.e., a visit to a medical provider or receipt of a prescribed medicine). The total cost of allergic rhinitis was estimated at $3.1 billion. Prescription medications comprised 43% ($1.5 billion) of the total cost and office/clinic visits comprised 40% ($1.4 billion). Twenty-three percent of the prescription medication expenditures were spent on second-generation antihistamines, 24% on inhaled corticosteroids, and 13% on sedating antihistamines. Allergic rhinitis was associated with approximately 3.3 million missed workdays and 1.5 million missed school days. Fifty-six percent of patients with allergic rhinitis received at least one prescription drug over the study year. Among these individuals, average prescription expenditures were $113 (95% CI, [$113, $124]), of which, $28 (95% CI, [$24, $33]) was paid out-of-pocket. The mean prescription medication expenditure was $153 (95% CI, [$135, $171]) for subjects with private insurance, $43 (95% CI, [$33, $53]) for individuals with no supplemental insurance, $103 (95% CI, [$69, $137]) for subjects with Medicare and/or Medicaid, and $211 (95% CI, [$95, $327]) with any other third party coverage. CONCLUSION: Prescription medications represent a substantial proportion of the total cost of allergic rhinitis. Average expenditures for prescription medications vary by prescription drug coverage.