Objective: To explore the effect of current medical insurance system on the elderly patients’ hospitalization costs, and to provide support for building a reasonable payment mechanism. Methods: Data of the hospitalization costs of elderly patient from January to April in 2008 were examined. The proportion of the costs was analysed. Results: The elderly patients were heavily burdened with medical costs, especially for the patients with non-medical insurance. The medical services gained by the patients were reduced with the age growing. Conclusion: A new medical aid system for the elderly should be set up in order to relieve the burden of the costs.