OBJECTIVE: To determine the extent to which the elimination of behavioral health benefits for selected beneficiaries of Oregon's Medicaid program affected general medical expenditures among enrollees using outpatient mental health and substance abuse treatment services. DATA SOURCE/STUDY SETTING: Twelve months of claims before and 12 months following a 2003 policy change, which included the elimination of the behavioral health benefit for selected Oregon Medicaid enrollees. STUDY DESIGN: We use a difference-in-differences approach to estimate the change in general medical expenditures following the 2003 policy change. We compare two methodological approaches: regression with propensity score weighting; and one-to-one covariate matching. PRINCIPAL FINDINGS: Enrollees who had accessed the substance abuse treatment benefit demonstrated substantial and statistically significant increases in expenditures. Individuals who accessed the outpatient mental health benefit demonstrated a decrease or no change in expenditures, depending on model specification. CONCLUSIONS: Elimination of the substance abuse benefit led to increased medical expenditures, although this offset was still smaller than the total cost of the benefit. In contrast, individuals who accessed the outpatient mental health benefit did not exhibit a similar increase, although these individuals did not include a portion of the Medicaid population with severe mental illnesses.