In the face of rising fiscal conservatism, many states and localities with sizable addict populations have reduced or eliminated public funding for methadone maintenance (MM) programs and permitted private-fee-for-service programs to replace them. The social and economic costs of these changed funding policies with reference to the California experience were analyzed. A two-and-a-half year follow-up of a sample of San Diego MM clients (195 men, 129 women) terminated from a public subsidized program compared outcome results to clients from publicly funded MM programs in Orange, Riverside and San Bernardino counties (129 men, 131 women). In a secondary analysis, San Diego clients who transferred into private (fee-for-service) treatment programs were compared with those who did not transfer. Major adverse consequences were found for clients unable or unwilling to transfer to private programs: higher crime and dealing rates, more contact with the criminal justice system, and higher rates of illicit drug use were demonstrated by nontransfer clients. Moreover, the savings resulting from a reduction of MM program costs were nearly offset by increased direct costs for incarceration, legal supervision, and other government-funded drug treatment. Indirect costs were not assessed.