Background: High out-of-pocket expenditures for prescription medications could lead people with chronic illnesses to restrict their use of these medications. Whether adults experience adverse health outcomes after having restricted medication use because of cost is not known. Methods: We analyzed data from 2 prospective cohort studies of adults who reported regularly taking prescription medications using 2 waves of the Health and Retirement Study (HRS), a national survey of adults aged 51 to 61 in 1992, and the Asset and Health Dynamics Among the Oldest Old (AHEAD) Study, a national survey of adults aged 70 or older in 1993 (n = 7991). We used multivariable logistic and Poisson regression models to assess the independent effect on health outcomes over 2 to 3 years of follow up of reporting in 1995-1996 having taken less medicine than prescribed because of cost during the prior 2 years. After adjusting for differences in sociodemographic characteristics, health status, smoking, alcohol consumption, body mass index (BMI), and comorbid chronic conditions, we determined the risk of a significant decline in overall health among respondents in good to excellent health at baseline and of developing new disease-related adverse outcomes among respondents with cardiovascular disease, diabetes, arthritis, and depression. Results: In adjusted analyses, 32.1% of those who had restricted medications because of cost reported a significant decline in their health status compared with 21.2% of those who had not (adjusted odds ratio [AOR], 1.76; confidence interval [CI], 1.27-2.44). Respondents with cardiovascular disease who restricted medications reported higher rates of angina (11.9% vs. 8.2%; AOR, 1.50; CI, 1.09-2.07) and experienced higher rates of nonfatal heart attacks or strokes (7.8% vs. 5.3%; AOR, 1.51; CI, 1.02-2.25). After adjusting for potential confounders, we found no differences in disease-specific complications among respondents with arthritis and diabetes, and increased rates of depression only among the older cohort. Conclusions: Cost-related medication restriction among middle-aged and elderly Americans is associated with an increased risk of a subsequent decline in their self-reported health status, and among those with preexisting cardiovascular disease with higher rates of angina and nonfatal heart attacks or strokes. Such cost-related medication restriction could be a mechanism for worse health outcomes among low-income and other vulnerable populations who lack adequate insurance coverage. [PUBLICATION ABSTRACT]