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Background Severe sepsis is associated with persistent high-levels of morbidity among older survivors. But the impact of severe sepsis on population health—particularly population levels of disability—is unknown. Objectives Ascertain the absolute number of patients surviving at least 3 years after severe sepsis in Medicare, and estimate their burden of cognitive dysfunction and disability. Design Retrospective cohort analysis of Medicare data. Setting All short-stay inpatient hospitals in the United States, 1996–2008. Participants Patients aged 65 and older. Measurements Severe sepsis was detected using a standard administrative definition. Case-fatality, prevalence and incidence rates were calculated. Results There were 637,867 Medicare patients alive at the end of 2008 who survived severe sepsis 3 or more years earlier. An estimated 476,862 (95% CI: 455,026, 498,698) had functional disability, with 106,311 (95% CI: 79,692, 133,930) survivors having moderate-to-severe cognitive impairment. The annual number of new 3-year survivors following severe sepsis rose 119% during 1998–2008. The increase in survivorship resulted from more new diagnoses of severe sepsis rather than a change in case fatality rates; severe sepsis rates rose from 13.0 per 1,000 Medicare beneficiary-years to 25.8 (p<0.001), whereas 3-year case fatality rates changed much less, from 73.5%to 71.3% (p<0.001) for the same cohort. Increasing rates of organ dysfunction among hospitalized patients drove the increase in severe sepsis incidence, with an additional small contribution from population aging. Conclusions Sepsis survivorship, which carries with it substantial long-term morbidity, is a common and rapidly growing public health problem for older Americans. There has been little change in long-term case fatality, despite changes in practice. Clinicians should anticipate more frequent sequelae of severe sepsis in their patient populations.