This Heritage Foundation memo suggests that states should end their participation in the Medicaid program, due to the additional costs and increased federal control imposed by the current health care legislation being considered in Congress. 

From the memo:

If all states withdraw from Medicaid, their collective savings would be $725 billion over the 2013-2019 period, but they would exceed $1 trillion over 10 years. This assumes that states will continue to spend at least 90 percent of what they spend now on Medicaid long-term care services with state-only dollars. On a state-by-state basis, every state except North Dakota would come out ahead financially by leaving Medicaid but continuing long-term care spending with state-only dollars. Of course, if North Dakota reduced its long-term care spending, it too would come out ahead.

The cost to the federal government to replace the state share of Medicaid, however, would be greater than $1 trillion as the entire Medicaid population would become eligible for the new, more expensive federal subsidies for premiums and cost-sharing. Moreover, the states would no longer pay for Medicare cost-sharing or the state "clawback" for Medicare prescription drugs.

Full memo: http://www.heritage.org/Research/HealthCare/wm2712.cfm  

Heritage Foundation. (2009). Medicaid meltdown: dropping Medicaid could save states $1 trillion. Smith, Dennis G. and Haislmaier, Edmund F.