The aim of this study was to estimate the direct medical costs of chronic obstructive pulmonary disease (COPD) in the United States using a public-payor perspective. Cost estimates were derived separately for 10 components of care using national survey databases and valued using Medicare and Medicaid reimbursement rates. COPD affects 15 million people in the U.S.A. and the total annual U.S. payment for care is $6.6 billion. Approximately one-third ($2.3 billion) is due to the cost of long-term oxygen therapy, one-quarter is attributed to hospitalizations and inpatient physician services ($1.9 billion), and one-seventh ($942 million) is due to nursing home stays. Other annual costs are outpatient physician visits ($480 million), prescription medications ($462 million), home healthcare ($309 million), emergency department visits ($148 million), outpatient diagnostic procedures ($55 million) and hospice care ($28 million). The cost of COPD is therefore considerable. The significant expenditure for long-term oxygen therapy indicates that disease severity is a major driver of costs. However, the cost of hospitalizations, nursing home stays, emergency department and physician visits are not insignificant.