Background: Anxiety and depression are common co-morbidities that can complicate the course of chronic obstructive pulmonary disease (COPD). The purpose of this study was to evaluate their impact on healthcare utilization and costs in a managed care COPD population. Methods: Administrative claims data were used to conduct a retrospective cohort study of COPD patients >= 40 years of age, including those with co-morbid COPD-Depression (including anxiety). COPD-Depression patients were matched to COPD patients without depression (COPD-Only cohort) using propensity scores. Conditional logistic regression models assessed the 1-year risk of COPD exacerbations (i.e., emergency room [ER] visit/inpatient hospitalization) between cohorts. Differences in annual all-cause and COPD-related utilization/costs, along with 2-year costs, were also compared between the cohorts. Results: There were 3,761 patients per cohort. Patients in the COPD-Depression cohort were 77% more likely to have a COPD-related hospitalization (odds ratio [OR]= 1.77, P < 0.001), 48% more likely to have an ER visit (OR = 1.48, P < 0.001), and 60% more likely to have hospitalization/ER visit (OR = 1.60, P < 0.001) compared to the COPD-Only cohort. Average annual all-cause medical cost per patient was $23,759 for COPD-Depression vs $17,765 for COPD-Only (P < 0.001) and total (medical plus pharmacy) cost was $28,961 vs $22,512 (P < 0.001), respectively; corresponding average annual COPD-related medical cost was $2,040 vs $1,392 (P < 0.001) and total cost was $3,185 vs $2,680 (P < 0.001). Similar trends were observed over the 2-year period. Conclusions: In the COPD population, patients with depression/anxiety have significantly higher risk of COPD exacerbations and annual all-cause and COPD-related costs than patients without these co-morbidities. These findings may have therapeutic implications and seem worthy of further exploration.