An estimated 850,000 fractures occur annually in the United States among persons aged > or = 65 years. Osteoporosis, an age-associated condition resulting in decreased bone density, is a major cause of these fractures, which typically result from a fall to the floor; approximately 25 million persons may be at increased risk for fracture because of low bone mass. During 1986-1995, annual medical-care costs for fractures among older adults ranged from $7 billion to $10 billion in 1986 to $13.8 billion in 1995. To determine more accurately the incidence of fractures at 10 anatomical sites among persons aged > or = 65 years during July 1991-June 1992 and to estimate the excess costs to Medicare of these fractures during the 1-year period following the fracture, claims data were analyzed for a 5% systematic sample (n = 1,288,618) of Medicare beneficiaries. This report summarizes the findings, which indicate that excess costs to Medicare for the 10 incident fracture types represent 3% of all Medicare costs for 1992.