Objectives To analyse changes in overall readmission rates and disparities in such rates, among patients aged 18-64 (those most likely to have been affected by reform), using all payer inpatient discharge databases (hospital episode statistics) from Massachusetts and two control states (New York and New Jersey). Design Difference in differences analysis to identify the post-reform change, adjusted for secular changes unrelated to reform. Setting US hospitals in Massachusetts, New York, and New Jersey. Participants Adults aged 18-64 admitted for any cause, excluding obstetrical. Main outcome measure Readmissions at 30 days after an index admission. Results After adjustment for known confounders, including age, sex, comorbidity, hospital ownership, teaching hospital status, and nurse to census ratio, the odds of all cause readmission in Massachusetts was slightly increased compared with control states post-reform (odds ratio 1.02, 95% confidence interval 1.01 to 1.04, P<0.05). Racial and ethnic disparities in all cause readmission rates did not change in Massachusetts compared with control states. In analyses limited to Massachusetts only, there were minimal overall differences in changes in readmission rates between counties with differing baseline uninsurance rates, but black people in counties with the highest uninsurance rates had decreased odds of readmission (0.91, 0.84 to 1.00) compared with black people in counties with lower uninsurance rates. Similarly, white people in counties with the highest uninsurance rates had decreased odds of readmission (0.96, 0.94 to 0.99) compared with white people in counties with lower uninsurance rates. Conclusions In the United States, and in Massachusetts in particular, extending health insurance coverage alone seems insufficient to improve readmission rates. Additional efforts are needed to reduce hospital readmissions and disparities in this outcome.