OBJECTIVES: To assess long-term adherence to oral hypoglycemic agents (OHAs) and determine if adherence affects total health care expenditures of reactive vs preventive services. STUDY DESIGN: Retrospective cohort study. METHODS: This study measured adherence to OHAs using Medical Expenditure Panel Survey 2013-2017 data. Adults 65 years and older who had diabetes and were taking at least 1 OHA were included. Respondents with a medication possession ratio (MPR) of at least 80% were considered adherent. Health care utilization and expenditure were compared among adherent and nonadherent respondents for preventive and reactive services. Utilization data were analyzed using negative binomial regression and expenditure data using γ-family generalized linear regression models. RESULTS: Approximately 67% of the cohort (n=1279) were adherent. The adherent group had greater health care expenditure overall than nonadherent respondents ($29,985 [95% CI, $27,161-$32,743] vs $24,623 [95% CI, $21,623-$28,122]; P<.05). Although expenditure was higher for prescription medications and office visits, mean emergency department expenditures were higher for adherent respondents. The utilization and proportion of expenditure on preventive vs reactive health care services did not differ by adherence as defined by an MPR of at least 80%. CONCLUSIONS: Increasing adherence provides an opportunity to improve CMS quality ratings. Our finding that adherence does not affect the financial burden of disease might be explained by the increased costs of preventive medication and increased comorbidity burden of these patients. Low adherence to OHAs encourages clinicians to be more proactive in ensuring that prescription medications are refilled regularly. By emphasizing equitable diabetes education and tailoring quality initiatives that minimize racial disparities, adherence can be better achieved.