To estimate the cost attributable to colon cancer treatment 1 year after diagnosis by cancer stage, comorbidity, treatment regimen, and Medicaid eligibility, we extracted an inception cohort of colon cancer patients aged 66 and older diagnosed between 1997 and 2000 from the Michigan Tumor Registry. Patients were matched to non-cancer control subjects in the Medicare Denominator file. We used the difference-indifferences method to estimate costs attributable to cancer, controlling for costs prior to diagnosis. The mean total colon cancer cost per Medicare patient was $29,196. The method can be applied to longitudinal data to estimate long term costs of cancer from inception where incident patients are identified from a tumor registry.