Between 7/93 and 6/95, Medicare gradually extended its maintenance immunosuppression medication (MIM) coverage from 1 to its current 3 years. OBJECTIVES: We hypothesized that lower income recipients would be more non-compliant because of the high cost of MIMs. We examined whether Medicare's extension benefited low-income recipients more. METHODS: We matched median family income for each patient's ZIP code from the 1990 Census with clinical data on first cadaveric renal transplants from the USRDS-distributed UNOS registry. We used Kaplan-Meier plots and Cox Proportional Hazards Models to analyze the differences in graft survival in the two chronological cohorts (6,279 and 10,060 recipients before and after the extended coverage, respectively) and two income groups (above and below the upper quartile family income of $33,277). RESULTS: When Medicare covered MIMs for 1 year, the high and lower income groups had equivalent graft survival at 1 year. By 3 years post-transplant the lower income group had a 4.4% greater graft failure (P=0.001). Among 1 year survivors, the lower income group eligible for only 1 year MIM coverage had a 5% greater graft failure at the end of three years post-transplant (P<0.001). The risk ratios from a multivariate Cox Proportional Hazards model indicate that Medicare's extended coverage eliminated the entire differential graft loss associated with lower incomes. Even in the next-to-highest income quartile, the graft loss (RR=1.37, P<0.008) and the benefits of extended coverage (RR=0.70, P=0.035) were significant. CONCLUSION: We infer that extended MIM coverage improved compliance for all but the highest income recipients. This should be considered when prescription drug benefits are designed.