To quantify the annual excess direct medical costs of vision impairment from the perspective of the Bureau of National Health Insurance in Taiwan and to examine whether the costs vary by severity and duration of vision impairment. A retrospective matched cohort analysis was conducted by using data from the Longitudinal Health Insurance Databases between January 1, 2000, and December 31, 2008. All patients newly diagnosed with vision impairment were categorized as having moderate vision loss, severe vision loss, or blindness. Each patient with vision impairment was matched to one randomly selected patient with normal vision by age (±1 year) and sex. At each level of vision impairment, generalized linear models were used to quantify the total annual excess costs and component costs incurred in the first and second years. Vision impairment was associated with significantly higher crude excess medical costs. At each level of vision impairment, the total crude medical costs were attributable to different resource utilization and dominated by non-eye-related medical care. After adjusting for covariates, the first-year annual excess costs increased with escalating severity of vision impairment: New Taiwan (NT) $9894 for moderate vision loss, NT $22,760 for severe vision loss, and NT $52,687 for blindness. Similarly, the second-year adjusted costs were estimated as NT $3477, NT $19,532, and NT $28,272 for moderate vision loss, severe vision loss, and blindness, respectively. Consistent with Western countries, vision impairment is associated with significantly increased health care costs in Taiwan. The excess costs seem to increase with severity of vision impairment and decrease in the second year. Copyright © 2013 International Society for Pharmacoeconomics and Outcomes Research (ISPOR). Published by Elsevier Inc. All rights reserved.