OBJECTIVE This study updates previous estimates of the economic burden of diagnosed diabetes and quantifies the increased health resource use and lost productivity associated with diabetes in 2012. RESEARCH DESIGN AND METHODS The study uses a prevalence-based approach that combines the demographics of the US population in 2012 with diabetes prevalence, epidemiological data, health care cost, and economic data into a Cost of Diabetes Model. Health resource use and associated medical costs are analyzed by age, sex, race/ethnicity, insurance coverage, medical condition, and health service category. Data sources include national surveys, Medicare standard analytical files, and one of the largest claims databases for the commercially insured population in the US RESULTS The total estimated cost of diagnosed diabetes in 2012 is 245billion,including 176 billion in direct medical costs and 69billioninreducedproductivity.Thelargestcomponentsofmedicalexpendituresarehospitalinpatientcare(43%ofthetotalmedicalcost),prescriptionmedicationstotreatthecomplicationsofdiabetes(18%),antidiabeticagentsanddiabetessupplies(12%),physicianofficevisits(9%),andnursing/residentialfacilitystays(8%).Peoplewithdiagnoseddiabetesincuraveragemedicalexpendituresofabout 13,700 per year, of which about 7,900isattributedtodiabetes.Peoplewithdiagnoseddiabetes,onaverage,havemedicalexpendituresapproximately2.3timeshigherthanwhatexpenditureswouldbeintheabsenceofdiabetes.Forthecostcategoriesanalyzed,careforpeoplewithdiagnoseddiabetesaccountsformorethan1in5healthcaredollarsintheUS,andmorethanhalfofthatexpenditureisdirectlyattributabletodiabetes.Indirectcostsincludeincreasedabsenteeism( 5 billion) and reduced productivity while at work (20.8billion)fortheemployedpopulation,reducedproductivityforthosenotinthelaborforce( 2.7 billion), inability to work as a result of disease-related disability (21.6billion),andlostproductivecapacityduetoearlymortality( 18.5 billion). CONCLUSIONS The estimated total economic cost of diagnosed diabetes in 2012 is 245billion,a41%increasefromourpreviousestimateof 174 billion (in 2007 dollars). This estimate highlights the substantial burden that diabetes imposes on society. Additional components of societal burden omitted from our study include intangibles from pain and suffering, resources from care provided by nonpaid caregivers, and the burden associated with undiagnosed diabetes.