Effective disease management in older adults relies on medication adherence to prevent adverse outcomes like hospitalization, particularly among those with cognitive impairment. In this study, we examined the impact of cognitive impairment on medication management, adherence, and hospitalization risk across levels of cognitive function. Analyzing data from 28,558 community-dwelling older adults, we found that those with dementia had the most difficulty managing medications (13.12%), followed by cognitive impairment without dementia (5.80%), and intact cognition (1.96%). Only persons with dementia showed a significant association between medication management difficulty and hospitalization risk (Odds Ratio [OR] = 1.71; 95% Confidence Intervals: 1.08, 2.70; p = .02). Cost-related medication nonadherence was associated with hospitalization risk solely among those with intact cognition (OR = 1.25; 95% CI: 1.07, 1.45; p = .004). Dementia was associated with higher odds of medication management difficulty and subsequently hospitalization risk, underscoring the need for resources to support medication use for this population.