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Clinical management of human immunodeficiency virus/acquired immune deficiency syndrome (HIV/AIDS) is progressing to include chronic/metabolic complications, which may impose a significant economic burden on beneficiaries and Medicare. We assessed the national economic impact of comorbid Type-II Diabetes Mellitus (T2DM) on HIV/AIDS patients and potential raical disparities. This study was a cross-sectional study of Medicare database 2013–2017. Analytical sample included HIV/AIDS positive beneficiaries continuously enrolled in Part A/B. Total medical costs, prescription costs, inpatient costs, outpatient costs, out-of-pocket (OOP) costs, and Medicare costs were assessed from Medicare claims. Generalized linear models with log-link and gamma distribution were used to examine the impact of T2DM on different costs. A total of 2,509 eligible HIV/AIDS positive beneficiaries were identified of which 19.9% (n=498) had T2DM. After adjusting for covariates, T2DM beneficiaries had higher inpatient costs: 63.34% (95% CI: 42.73%−86.94%), outpatient costs: 50.26% (95% CI: 30.70%−72.75%), Medicare costs: 27.95% (95% CI: 13.81%−43.84%), OOP costs: 59.15% (95% CI: 40.02%−80.92%), and total medical costs: 27.83% (95% CI: 14.27%−43.00%) than non-T2DM beneficiaries. Incremental costs were higher among African Americans than Caucasians. Comorbid T2DM mposes a significant economic burden on HIV/AIDS patients and Medicare, which is higheramong African Americans. [ABSTRACT FROM AUTHOR]