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To improve perinatal outcomes in the United States, access to prenatal care was expanded through Medicaid and women were encouraged to enter prenatal care early.The objective of this study was to determine if expanded eligibility for Medicaid increased use of prenatal care and reduced ethnic differences in use of prenatal care.We conducted secondary analysis of California birth certificate data for 1990, 1995, and 1998.We studied live-born singleton infants born to black, Asian, Latina, and white women (n = 1,483,951).Inadequate utilization of prenatal care.The proportion of live-born infants whose mothers had inadequate prenatal care decreased from 20% in 1990 to 14% in 1995 and 12% in 1998. In addition, the proportion of pregnant women with no insurance or who were self-paying fell from 13.1% in 1990 to 4.2% in 1995 and 3.6% in 1998 (P <0.001). Reductions in overall prevalence of inadequate use of prenatal care and ethnic disparities in use of prenatal care were not fully explained by increases in Medicaid coverage.Since California expanded access to Medicaid-funded prenatal care, there has been a substantial reduction in inadequate use of prenatal care and fewer women have no insurance or are self-paying. To further reduce ethnic disparities in use of health services, new policies must be developed to remove nonfinancial barriers to early and continuous use of prenatal care.