Abstract Background Traditional Chinese Medicine (TCM) has long been a widely recognized medical approach and has been covered by China’s basic medical insurance schemes to treat lung cancer. But there was a lack of nationwide research to illustrate the impact of the use of TCM on lung cancer patients’ economic burden in mainland China. Therefore, we conduct a nationwide study to reveal whether the use of TCM could increase or decrease the medical expenditure of lung cancer inpatients in mainland China. Methods This is a 7-year cross-sectional study from 2010 to 2016. The data is a random sample of 5% from lung cancer claims data records of Chinese Urban Employee Basic Medical Insurance (UEBMI) and Urban Resident Basic Medical Insurance (URBMI). Mann-Whitney test was used to compare inpatient cost data with positive skewness. Ordinary least squares regression analysis was performed to compare the total TCM users’ hospitalization cost with TCM nonusers’, to examine whether TCM use is the key factor inducing relatively high medical expenditure. Result A total of 47,393 lung cancer inpatients were included in this study, with 38,697 (81.7%) of them at least using one kind of TCM approach. The per inpatient medical cost of TCM users was RMB18,798 (USD2,830), which was 65.2% significantly higher than that of TCM nonusers (P