Background: Asthma and COPD are characterized by substantial racial disparities in morbidity and mortality. We hypothesized that because African-American patients with these conditions experience greater mortality and morbidity than their white counterparts, they would use more health-care resources when no difference in health insurance exists. Methods: A retrospective, population-based cohort study was conducted using Maryland Medicaid Managed Care patient encounter data. We compared health services utilization and cost outcomes in both African-American and white patients with COPD, asthma, or coexisting COPD and asthma. Results: The study population consisted of 9,131 patients with COPD, asthma, or both conditions. Of the total population, 52% were African American (n ؍ 4,723), and 44% were white (n ؍ 4,021); all other races were combined into the "unknown race" category to account for the remaining 4% (n ؍ 387). After controlling for age, gender, cohort allocation, and comorbidities, we found that African-American adults with COPD, asthma, or coexisting COPD and asthma actually used fewer medical services and accounted for lower medical costs than white adults. Conclusions: Lower health services utilization and medical costs among African-American patients with COPD and asthma may provide a possible explanation for the racial disparities in outcomes of patients with these conditions.(CHEST 2009; 136:405-411)