OBJECTIVES: The objective of this study was to evaluate whether Medicaid coverage gap is associated with higher risks for diabetes-specific hospitalizations and all-cause mortality among working-aged adults (i.e., those aged 19-64 years) with diabetes. METHODS: Using administrative claims data, we conducted a retrospective cohort study of working-aged adults with diabetes and who were enrolled in a state Medicaid program. Coverage gap was defined as at least one month interruption in their Medicaid enrollment from January 2002 to December 2003. The primary outcomes of interest were diabetes-specific hospitalization and all-cause mortality during follow-up (January to December 2004). Multivariate regression analyses were performed to assess the independent association between adherence to statin and outcome measures. Key confounding variables include age, gender, race, comorbidities (measured using Charlson Comorbidity Index), prior hospitalization due to diabetes, and use of medications essential to diabetes management including oral hypoglycemic agents, insulin, antihypertensive agents, and statins. RESULTS: A total 24,996 patients were included in the study. Mean age 50.2±10.3 years, 29.7% male, 70.3 female; 30.3% white, 59.3% black. About 86% had continuous Medicaid coverage and 14% had at least one month gap in their Medicaid coverage. During follow-up, those with at least one-month in their coverage were 16.2% less likely (OR: 0.838; 95%CI: 0.714-0.985) to have diabetes-specific hospital admissions and 44.9% less likely (OR: 0.551; 95%CI: 0.430-0.706) to have all-cause mortality during the follow up period. CONCLUSIONS: The results from this study suggest that gaps in Medicaid coverage are not associated with higher risks for diabetes-specific hospitalizations and all-cause mortality in the follow up period. However, the study lacked information on why coverage gaps occurred and whether individuals with coverage gaps transitioned to other insurance coverage.