This report, which is part of the series, New Federalism: Issues and Options for States, examines the characteristics of Medicaid-eligible adults and the potential effects of insurance coverage on their access to care. Adults who are eligible for Medicaid but not enrolled encounter greater obstacles to care than their Medicaid-covered counterparts, according to data from the 1997 National Health Interview Survey. The Medicaid-eligible uninsured adults are less likely to have chronic medical conditions and are in better overall health than their enrolled counterparts, but not all are free of health problems. When uninsured Medicaid-eligible adults are compared with Medicaid-covered adults with the same health status, family income, and other characteristics, the uninsured are more likely to report unmet need, to lack a usual source of care, and to make less use of physician services. Families of the uninsured are more likely to be burdened with out-of-pocket health care costs.