Purpose Medicare patients with advanced cancer have low rates of hospice use. We sought to evaluate hospice use among patients in Medicaid, which insures younger and indigent patients, relative to those in Medicare. Patients and Methods Using linked patient-level data from California (CA) and New York (NY) state cancer registries, state Medicaid programs, NY Medicare, and CA Surveillance, Epidemiology, and End Results–Medicare data, we identified 4,797 CA Medicaid patients and 4,001 NY Medicaid patients ages 21 to 64 years, as well as 27,416 CA Medicare patients and 16,496 NY Medicare patients ages ≥ 65 years who were diagnosed with stage IV lung cancer between 2002 and 2006. We evaluated hospice use, timing of enrollment, and location of death (inpatient hospice; long-term care facility or skilled nursing facility; acute care facility; home with hospice; or home without hospice). We used multiple logistic regressions to evaluate clinical and sociodemographic factors associated with hospice use. Results Although 53% (CA) and 44% (NY) of Medicare patients ages ≥ 65 years used hospice, fewer than one third of Medicaid-insured patients ages 21 to 64 years enrolled in hospice after a diagnosis of stage IV lung cancer (CA, 32%; NY, 24%). A minority of Medicaid patient deaths (CA, 19%; NY, 14%) occurred at home with hospice. Most Medicaid patient deaths were either in acute-care facilities (CA, 28%; NY, 36%) or at home without hospice (CA, 39%; NY, 41%). Patient race/ethnicity was not associated with hospice use among Medicaid patients. Conclusion Given low rates of hospice use among Medicaid enrollees and considerable evidence of suffering at the end of life, opportunities to improve palliative care delivery should be prioritized.