["The Journal of Rural Health, Volume 42, Issue 2, Spring 2026. ", "\nABSTRACT\n\nPurpose\nTo address rural−urban differences in health services use and costs among Medicare fee‐for‐service (FFS) beneficiaries by telehealth use before and during the COVID‐19 pandemic.\n\n\nMethods\nThe study population consisted of a nationally representative 5% sample of Medicare FFS beneficiaries aged 65 years and older during 2019−2020. Rural−Urban Continuum Codes identified rural−urban residential locations. Propensity scores were used to correct for selection bias and identify matching cohorts of telehealth and non‐telehealth users. Differences in health services use and costs by telehealth use were addressed using difference in differences logistic and generalized linear models.\n\n\nFindings\nTelehealth use curbed the decline in in‐person outpatient visits for rural and urban beneficiaries early in the pandemic. During 2020, both rural and urban telehealth users had significantly lower probabilities of being hospitalized compared to 2019 (marginal effects [ME]: rural −0.22, urban −0.18), and were less likely to visit the emergency department (ED) (ME: rural −0.23, urban −0.20). Yet, telehealth users were more likely to be hospitalized than non‐telehealth users during 2020 (ME: rural 0.018, urban 0.011) and more likely to visit the ED (ME: rural 0.032, urban 0.024).\nWhile total costs were significantly higher for telehealth users (rural $8484, urban $7272) than non‐telehealth users (rural $6749, urban $5201) during 2020, total costs were reduced by a greater amount ($9200) for rural telehealth users than urban ($8000) and rural non‐telehealth ($6900) counterparts.\n\n\nConclusions\nWhile telehealth users realized higher total costs of care in 2019−2020, rural telehealth users realized greater declines in total costs than rural non‐telehealth users and urban beneficiaries.\n\n"]