OBJECTIVES: Chronic obstructive pulmonary disease (COPD) is a significant public health problem resulting in substantial societal burden. The main objective of this study was to estimate direct medical costs attributable to COPD. METHODS: Data from the Household Component of 1996 Medical Expenditures Panel Survey (MEPS), a nationally representative sample of the non-institutionalized, U.S. civilian population were analyzed. MEPS data provided information on demographics, health conditions, prescription medications, and health resource utilization. Persons >=45 years with COPD (ICD-9=491 [chronic bronchitis], ICD-9=492 [emphysema]) as their primary diagnosis were included. Direct medical costs were defined as the sum of insurance and patient payments for health services attributable to COPD. This included emergency department visits, hospital outpatient visits, inpatient stays, outpatient clinic and office visits, and prescription medications. Descriptive statistics were conducted. Results were weighted to reflect population estimates. RESULTS: In 1996, 1.4 million people over 45 years of age received medical treatment for COPD. 65.7% of this cohort were 65 and older. Direct medical costs attributable to COPD totaled $ 3.4 billion. COPD-associated direct medical costs for persons 65 and older were $3.1 billion. 77 % of the total medical costs in this group of patients were due to hospital admissions, 14.3 % were for prescription medications, and 5.5 % were for emergency room and hospital outpatient visits. CONCLUSIONS: Inpatient admissions in the elderly accounted for the majority of the COPD-associated costs. Interventions designed to manage COPD more effectively, including appropriate utilization of prescription medications, may help minimize ER visits and hospital admissions, thereby decreasing total costs of managing COPD.