On Oct. 5, 2021, a report from the U.S. Department of Health and Human Services (HHS) showed that COVID-19 vaccinations may have helped prevent hundreds of thousands of new COVID-19 infections and tens of thousands of deaths among seniors.

This study updates Assistant Secretary for Planning and Evaluation’s (ASPE) previous analysis of the associations between COVID-19 hospitalizations and deaths among Medicare beneficiaries and COVID-19 vaccination rates, with full year data through the end of 2021. The study uses a combination of person-level Medicare claims and county-level vaccination data to estimate reductions in COVID-19 hospitalizations and deaths among Medicare beneficiaries associated with COVID-19 vaccinations in 2021.

The researchers found that vaccines were associated with 670,000-680,000 fewer hospitalizations and 330,000-370,000 fewer deaths among Medicare beneficiaries in 2021, with the largest reductions during the summer Delta surge. This represents a 39–47 percent reduction in these outcomes. Reductions in hospitalization and deaths linked to vaccination rates occurred in all racial and ethnic groups and in all 50 states.

Using Medicare FFS claims data and county-level vaccination rates, the ASPE estimate savings of about $2.6 billion from reduced Medicare hospitalizations associated with COVID-19 vaccinations in early 2021. These cost savings reflect 107,000 fewer Medicare (FFS and Medicare Advantage) COVID-19 hospitalizations during this period, compared to projections if no COVID-19 vaccines were available during that period.

Hospitalization cost savings from this early vaccination period were nearly large enough to offset the cost for approximately 67.7 million single-dose COVID-19 vaccines, or 31.2 million two-dose series, assuming an average cost of $40 per dose.