Background/Study Context: Magnetic resonance imaging (MRI) markers of cerebrovascular disease and atrophy are common in older adults and are associated with cognitive and medical burden. However, the extent to which they are related to health care expenditures has not been examined. We studied whether increased Medicare expenditures were associated with brain markers of atrophy and cerebrovascular disease in older adults. Methods: A subset of participants (n = 592; mean age = 80 years; 66% women) from the Washington Heights Inwood Columbia Aging Project (WHICAP), a community-based observational study of aging in upper Manhattan, received high-resolution MRI and had Medicare expenditure data on file. We examined the relationship of common markers of cerebrovascular disease (i.e., white matter hyperintensities and presence of infarcts) and atrophy (i.e., whole brain and hippocampal volume) with Medicare expenditure data averaged over a 10-year period. Main outcome measures were (a) mean Medicare payment per year across the 10-year interval; (b) mean payment for outpatient care per year; and (c) mean payment for inpatient care per year of visit. In addition, we calculated the ratio of mean inpatient spending to mean outpatient spending as well as the ratio of mean inpatient spending to mean total Medicare spending. Results: Increased Medicare spending was associated with higher white matter hyperintensity volume, presence of cerebral infarcts, and smaller total brain volume. When examining specific components of Medicare expenditures, we found that inpatient spending was strongly associated with white matter hyperintensity volume and that increased ratios of inpatient to outpatient and inpatient to total spending were associated with infarcts. Conclusion: Medicare costs are related to common markers of “silent” cerebrovascular disease and atrophy.