To examine the effect of capitated transportation brokerage services on Medicaid beneficiaries' access to care and expenditures. The study period from 1996 to 1999 corresponds to the period of a natural experiment during which Georgia and Kentucky implemented transportation brokerage services. Effects were estimated for asthmatic children and diabetic adults. We used difference-in-differences models to assess the effects of transportation brokerage services on access to care, measured by Medicaid expenditures and health services use. The study design is strengthened by the staggered implementation dates between states and within each state. For asthmatic children, transportation brokerage services increased nonemergency transportation expenditures and the likelihood of using any services; reductions in monthly expenditures more than offsetting the increased transportation costs. For diabetic adults, nonemergency transportation costs decreased despite increased monthly use of health services; average monthly medical expenditures and the likelihood of hospital admission for an ambulatory care-sensitive condition (ACSC) also decreased. The shift to transportation brokerage services improved access to care among Medicaid beneficiaries and decreased the expenditures. The increase in access combined with reduced hospitalizations for asthmatic children and ACSC admissions for diabetic adults are suggestive of improvements in health outcomes.