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Background Guidelines in 2013 and 2014 recommended Epidermal Growth Factor Receptor (EGFR) testing for metastatic lung adenocarcinoma patients as the efficacy of targeted therapies depends on the mutations. However, adherence to these guidelines and the corresponding costs have not been well-studied. Methods We identified 2362 patients at least 65 years old newly diagnosed with metastatic lung adenocarcinoma from January 2013 to December 2015 using the SEER-Medicare database. We examined the utilization patterns of EGFR testing and targeted therapies including erlotinib and afatinib. We further examined the costs of both EGFR testing and targeted therapy in terms of Medicare costs and patient out-of-pocket (OOP) costs. Results The EGFR testing rate increased from 38% in 2013 to 51% and 49% in 2014 and 2015 respectively. The testing rate was 54% among the 394 patients who received erlotinib, and 52% among the 42 patients who received afatinib. The median Medicare and OOP costs for testing were $1483 and $293. In contrast, the costs for targeted therapy were substantially higher with median 30-day costs at $6114 and $240 for erlotinib and $6239 and $471 for afatinib. Conclusion This population-based study suggests that testing guidelines improved the use of EGFR testing, although there was still a large proportion of patients receiving targeted therapy without testing. The costs of targeted therapy were substantially higher than the testing costs, highlighting the need to improve adherence to testing guidelines in order to improve clinical outcomes while reducing the economic burden for both Medicare and patients.