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BACKGROUND AND OBJECTIVES The evidence base on health services use and cost burdens associated with transition to severe cognitive impairment (SCI) and dementia is underdeveloped. We examine how change in cognitive impairment status influences nursing-home use, hospitalizations, and out-of-pocket expenditures (OOP). RESEARCH DESIGN AND METHODS We use prospective data from the Health and Retirement Study (2007/08-2015/16) on adults 70-years and older meeting research criteria for cognitive impairment not dementia (CIND) at baseline (Unweighted N=1,692) to fit two-part models testing how reversion to normal cognition, stability (CIND maintenance), and transition into SCI/dementia influence change in yearly nursing-home use, hospitalizations, and OOP. RESULTS Over 8-years, 5.9% reverted, 15.9% remained CIND, 14.9% transitioned to SCI/dementia, and 63.3% died. We observed substantial increases in the propensity of any nursing home use that were particularly pronounced among those that transitioned or died during follow-up, and similar but less pronounced differences in patterns of inpatient hospitalizations. Average baseline OOP spending was similar among reverters ($1156 [95% confidence interval=832;1,479]), maintainers ($1,145 [993;1,296]), and transitioners ($1,385 [1,041;1,730]). Individuals that died during follow-up spent $2,529 [2,101;2,957]. By the 8th year of follow-up, spending among reverters increased to $1,402 [869;1,934], and $2,188 [1,402;2,974], and $8,988 [5,820;12,157] for maintainers and transitioners, respectively. Average spending at the wave preceding death was $7,719 [4,345;11,094]. Estimates were only partly attenuated through adjustment to covariables. DISCUSSION AND IMPLICATIONS A better understanding of variations in health services use and cost burdens among individuals with mild cognitive impairment can help guide targeted care and financial planning.