On April 26, the Center on Budget and Policy Priorities (CBPP) released a brief which claims that the federal government will cover the majority of the cost of the expansion of Medicaid under the national health care reform law.  CBPP projects that state spending on Medicaid will be only 1.25 percent higher than what it was projected to be without health care reform.  The brief explains that expanding Medicaid will lower costs for states and localities because they will have to spend less on the coverage of the uninsured in hospitals and on agencies that offer mental health services to many uninsured patients.  

From the report: The Medicaid expansion will cost states $20 billion over the next decade, increasing their overall Medicaid spending by 1.25 percent compared to what they were projected to spend in the absence of health reform. This includes the cost of covering individuals who already are eligible for Medicaid, currently are uninsured, and are expected to enroll when the expansion is implemented.  

Full report: Health Reform Is a Good Deal for States (PDF | 123.62 KB)

Center on Budget and Policy Priorities.  (2010).  Health reform is a good deal for states.