Medicaid programs which provide services for low-income persons who have high medical needs have been criticized for high costs and have raised questions about overuse of physician services. A Baltimore SMSA household interview of use of health services permitted comparison of use of physician and preventive services controlled for morbidity by Medicaid recipients and two other income groups. Medicaid recipients were sickest and had higher physician use. They were more likely to have visits suggested by a physician, to be asked to return, and to be given injections. Physician visit rates were higher for each morbidity category, particularly for Medicaid healthy, who also used more preventive services in two weeks. Higher use of services by Medicaid recipients is accounted for by higher morbidity and increased need and demand for preventive services. Constraints on the use of physician services now most directly affect use of preventive services by those of low income without Medicaid benefits in the Baltimore SMSA.