OBJECTIVES: The objective of this study was to evaluate the main effect of health insurance plan type on health resource utilization (emergency room (ER) visit or hospital admission) in privately insured patients with Type 2 diabetes between the ages of 18 to 64 years.  The outcomes of interest were the odds of an emergency room visit or a hospital admission associated in patients with Type 2 diabetes.  METHODS: The data source was the 2000-2001 MarketScan database, which is comprised of administrative claims data for over 2.5 million privately insured individuals in the United States.  The odds of an emergency room visit or hospital admission were evaluated using multiple logistic regression models specified to control for demographic and clinical characteristics of the target patient population.  A propensity score analysis using the stratification approach was also done to further control for selection bias.  RESULTS: After adjusting for the covariates, patients enrolled in FFS plans were significantly more likely to experience an ER visit or an inpatient stay compared to patients in capitated plans (odds ratio for ER visit: 1.64, p<0.05; odds ratio for an inpatient stay: 1.11, p<0.05).  CONCLUSIONS: The results of this study confirm that utilization rates are higher in FFS plans; however, the strength of the association was not as robust when the regression models were adjusted for propensity score.  Capitated plans seek to reduce resource utilization.