The aim of this study was to analyze social welfare and healthcare costs and fall-related healthcare costs after a group-based exercise program. The 10-week exercise program, which started after discharge from the hospital, was designed to improve physical fitness, mood, and functional abilities in frail elderly women. Sixty-eight acutely hospitalized and mobility-impaired women (mean age 83.0, SD 3.9 years) were randomized into either group-based (intervention) or home exercise (control) groups. Information on costs was collected during 1 year after hospital discharge. There were no differences between the intervention and control groups in the mean individual healthcare costs: 4381€ (SD 3829€) vs 3539€ (SD 3967€), P=0.477, in the social welfare costs: 3336€ (SD 4418€) vs 4073€ (SD 5973€), P=0.770, or in the fall-related healthcare costs: 996€ (SD 2612€) vs 306€ (SD 915), P=0.314, respectively. This exercise intervention, which has earlier proved to be effective in improving physical fitness and mood, did not result in any financial savings in municipal costs. These results serve as a pilot study and further studies are needed to establish the cost-effectiveness of this exercise intervention for elderly people.