ObjectiveMultimorbidity is a growing challenge in low-income and middle-income countries. This study investigates the effects of multimorbidity on annual medical costs and the out-of-pocket expenditures (OOPEs) along the cost distribution.MethodsData from the nationally representative China Health and Retirement Longitudinal Study (CHARLS 2015), including 10 592 participants aged ≥45 years and 15 physical and mental chronic diseases, were used for this nationally representative cross-sectional study. Quantile multivariable regressions were employed to understand variations in the association of chronic disease multimorbidity with medical cost and OOPE.ResultsOverall, 69.5% of middle-aged and elderly Chinese had multimorbidity in 2015. Increased number of chronic diseases was significantly associated with greater health expenditures across every cost quantile groups. The effect of chronic diseases on total medical cost was found to be larger among the upper tail than those in the lower tail of the cost distributions (coefficients 12, 95% CI 6 to 17 for 10th percentile; coefficients 296, 95% CI 71 to 522 for 90th percentile). Annual OOPE also increased with chronic diseases from the 10th percentile to the 90th percentile. Multimorbidity had larger effects on OOPE and was more pronounced at the upper tail of the health expenditure distribution (regression coefficients of 8 and 84 at the 10th percentile and 75th percentile, respectively).ConclusionMultimorbidity is associated with escalating healthcare costs in China. Further research is required to understand the impact of multimorbidity across different population groups.