BACKGROUND: Medication nonadherence in individuals with type 2 diabetes can lead to poor glycemic control, resulting in increased risk for diabetes-related complications. OBJECTIVE: To examine associations between factors (ie, drug coverage satisfaction and cost-reducing behavior) and medication nonadherence among Medicare beneficiaries with type 2 diabetes. METHODS: We analyzed the 2016 Medicare Current Beneficiary Survey Public Use File for beneficiaries aged 65 years and older with reported type 2 diabetes (n=1,430; weighted n=5,846,943). Medicare beneficiaries were considered to have medication nonadherence if they reported skipping doses or taking smaller doses than prescribed. A survey-weighted logistic model, adjusted for sociodemographics and comorbidities, was conducted to examine associations of drug coverage satisfaction and cost-reducing behavior with medication nonadherence. RESULTS: Among Medicare beneficiaries aged 65 years and older with type 2 diabetes, 10.3% reported medication nonadherence. In the adjusted analysis, the risk for medication nonadherence was higher among those who were dissatisfied with the amount paid for medications (OR = 2.43; P = 0.002) compared with those who were satisfied, and those who spent less on basic needs to save for medications were more likely to report medication nonadherence (OR = 2.23; P = 0.011) than those who did not. CONCLUSIONS: Our findings suggest that medication nonadherence among Medicare beneficiaries with type 2 diabetes is associated with dissatisfaction with the amount paid for medications and cost-reducing behavior. Interventions that lower medication costs for Medicare beneficiaries may help to improve medication adherence among this at-risk population. DISCLOSURES: No outside funding supported this study. The authors have no conflicts of interest to disclose.