OBJECTIVES: The Affordable Care Act provided financial incentives for states to expand health coverage to all uninsured individuals earning below 138% of the federal poverty level. Kentucky adopted a managed care Medicaid expansion with aggressive outreach efforts, whereas Arkansas used federal funds to purchase commercial insurance through the federal marketplace and prohibited state-funded outreach efforts after June 30, 2014. Our objective was to determine if these alternate methods of Medicaid expansions had a differential impact on all-cause and preventable hospitalizations and racial and ethnic disparities. METHODS:  The state population was obtained from the census data and stratified into cohorts based on county of residence, age (18-24, 25-34,35-44, 45-54, 55-64), gender and race/ethnicity. We used the State Inpatient Databases for 2013 and 2014 from Arkansas and Kentucky to calculate all-cause and preventable hospitalizations for each county-demographic strata. A difference in difference model was used to estimate the effect of expansion type and a difference in difference in difference model was used to estimate racial and ethnic disparities. RESULTS:  The rate of change of all-cause and preventable hospitalizations were 2.4% (p=0.017) and 4.4% (p=0.102) higher in Arkansas compared to Kentucky. There was no significant difference in the rate of change of all-cause and preventable hospitalizations amongst blacks (p=0.094;p=0.338) and whites (p=0.117;p=0.351) in Arkansas and Kentucky. However, the rate of change of total and preventable hospitalizations among Hispanics in Arkansas was 160% (p<0.001) and 130% (p=0.015) higher compared to Kentucky CONCLUSIONS:  The Kentucky Medicaid expansion appears to be more successful in reducing the rate of increased inpatient hospitalizations which is in part explained by smaller rates of change in preventable hospitalization amongst Hispanics. This may be attributed to their aggressive outreach efforts which may have had more Hispanics acquire coverage through expansion and get care in an outpatient setting to avoid preventable hospitalizations.