Objective To examine the extent of the health risks of consuming multiple medications among the older population. Data Sources/Study Setting Secondary data from the period 2004–2006. The study setting was the province of Ontario, Canada, and the sample consisted of individuals aged 65 years or older who responded to a national health survey. Study Design We estimated a system of equations for inpatient and emergency department (ED) services to test the marginal effect of medication use on hospital services. We controlled for endogeneity in medication use with a two‐stage residual inclusion approach appropriate for nonlinear models. Principal Findings Increased prescription drug use has the effect of increasing the likelihood of both being admitted into hospital and visiting a hospital ED. Each additional medication is associated with a 2–3 percent increase in the likelihood of hospitalization and a 3–4 percent increase in the likelihood of an ED visit, after controlling for past utilization, health status, the endogeneity of medication use, and the unobserved factors that may affect the use of both services. Conclusions Multiple medications appear to increase the risk of hospitalization among seniors covered by a universal prescription drug plan. These results raise questions about the appropriateness of medication use and the need for increased oversight of current prescribing practices.