The present study tested the hypothesis that Medicaid-financed African Americans would be more likely to receive outpatient mental health treatment than African Americans whose treatment was financed by private insurance. The hypothesis was confirmed: when compared with privately insured persons eligible for care under either fee-for-service or managed care, the Black-White gap in outpatient service use was significantly smaller under Medicaid. There was no racial difference in outpatient treatment rates among the uninsured. The often-noted difference between Blacks and Whites in the likelihood of receiving outpatient mental health treatment is confined largely to the privately insured.