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Simple Summary: Almost three years into the pandemic, older individuals still account for the vast majority of COVID-19 related deaths. While most older adults in the United States have been fully vaccinated, many have not yet completed the recommended course of booster vaccinations. To address U.S. data gaps on Vaccine Effectiveness (VE) in this high-risk population and to best formulate effective booster and other prevention policies, we conducted an observational study of VE in a 17 million Medicare population cohort including 5.7 million fully vaccinated individuals during the Delta variant phase of the pandemic. We observed significant VE in this higher risk population against infections and more so against hospitalizations, apparent waning vaccine-induced immunity, and found added protection from prior COVID-19 infection. We also uniquely report that VE increased over a period of weeks as the Delta surge progressed, suggesting that in addition to the critical protective role of vaccination, individual behavioral factors, such as increased masking or social distancing, likely contributed to this VE increase. Our results emphasize the need for a multipronged prevention strategy to combat the ongoing COVID-19 pandemic including not only vaccination but also complementary preventive measures to reduce the risk of infection, especially for individuals at the highest risk. Throughout the pandemic, individuals 65 years and older have contributed most COVID-19 related deaths. To best formulate effective vaccination and other prevention policies to protect older adults, large scale observational studies of these higher risk individuals are needed. We conducted a Vaccine Effectiveness (VE) study during the B.1.617.2 Delta variant phase of the pandemic in July and August 2021 in a cohort of 17 million Medicare beneficiaries of which 5.7 million were fully vaccinated. We found that individuals fully vaccinated with the Pfizer-BioNTech BNT162b2 and Moderna mRNA-1273 vaccines in January 2021 had 2.5 times higher breakthrough infections and hospitalizations than those fully vaccinated in March 2021, consistent with waning of vaccine-induced immunity. Measuring VE weekly, we found that VE against hospitalization, and even more so against infection, increased from July 2021 through August 2021, suggesting that in addition to the protective role of vaccination, increased masking or social distancing might have contributed to the unexpected increase in VE. Ongoing monitoring of Medicare beneficiaries should be a priority as new variants continue to emerge, and the VE of the new bivalent vaccines remains to be established. This could be accomplished with a large Medicare claims database and the analytics platform used for this study. [ABSTRACT FROM AUTHOR]