OBJECTIVES: To estimate the disease burden of herpes zoster (HZ) in people age 60+ and health and budget impact (HBI) of a vaccine to prevent HZ from the payer's perspective. METHODS: The number of annual HZ cases and the associated costs for the 60+ population were estimated from published incidence, the base case U.S. population in 2006, and the age-specific one year average incremental cost of HZ derived from a U.S. claims database. A model was constructed to track individuals through three states (living not vaccinated, living and vaccinated, deceased) from year 2006 – 2014. Vaccine usage rates were assumed to be between 1-3 % in 2006, 4-10% in 2007, and 6-18% in years 2008-2014. Age specific efficacy from the Shingles Prevention Study was used to estimate HZ cases and costs averted, as well as the net cost of a vaccination program at a vaccine price of $150/dose. RESULTS: The annual incident number of HZ cases was estimated at 428,000 (60+ population). Annual direct medical costs were estimated at $494 million. Approximately 30% to 60% of the 60+ population were vaccinated by year 2014. Through 2014, vaccination was projected to avert between 210,000 and 540,000 incident cases of HZ, resulting in cost avoidance between $190 and $460 million, and a net cost of the vaccination program between 1.8 and 4.2 billion. The estimated lower and upper bounds of the average per-member-per-month cost for years 2006 – 2014, for vaccinating a 60+ population with an age distribution (total population) that is equivalent to that of the U.S. population were 6 and 13 cents respectively. CONCLUSION: HZ imposes a significant health and economic burden on the 60+ population. An HZ vaccination program is estimated to have a minimal budget impact and may potentially reduce the disease burden of HZ.