BackgroundHealthcare inequity drives high costs, worse outcomes and is heavily influenced by social determinants of health (SDOH). Addressing health behaviors and SDOH through a culturally competent community-based exposure may be effective in improving value for Medicaid enrollees. This study aims to evaluate whether such an exposure lowers costs at equal or improved quality.MethodsA retrospective cohort study leveraging claims data was conducted in Detroit, Michigan from April 2021 to April 2022 to examine the impact of a community-based peer support program on clinical, utilization and financial outcomes. A one-to-one propensity matching of 738 pairs of African American Medicaid enrollees was generated, and compared the difference of differences between inpatient, emergency department, prescription and outpatient paid amounts, utilization, and available claims-based quality metrics.ResultsCompared to controls, peer support recipients generated significantly lower per member per month costs ($115, (95% CI $20.2 to $210)). Recipients showed a significant increase in the Adult Access to Preventative/Ambulatory Health Services 20–44 year old quality metric (8.31% (95% CI 0.35–16.3%)). Member retention in the health insurance plan was significantly higher for peer support recipients vs. the control group by 3.62% (p < 0.05). Peer support recipients displayed non-significant improvement on all other utilization and actuarial measures. No significant difference was found for any of the other examined quality metrics.ConclusionsAmong a population of African American Medicaid enrollees, a culturally competent community-based intervention was associated with lower cost and better member retention with preserved or improved quality.Supplementary InformationThe online version contains supplementary material available at 10.1186/s13690-023-01117-z.