This report from the Center Budget and Policy Priorities examine the effect that Medicaid expansion will have on state budgets.

From the report:  

Under the Affordable Care Act (ACA), states are required to expand their Medicaid programs to cover all non-elderly adults and children with incomes up to 133 percent of the federal poverty line ($29,400 for a family of four) starting on January 1, 2014. According to estimates from the Congressional Budget Office (CBO), the cost to states of this expansion will be very modest. That is because the federal government will pick up 96 percent of the costs of the Medicaid expansion over the next 10 years. As a result, between 2014 and 2019, states would see their Medicaid costs rise by only 1.25 percent compared to what they were projected to spend in the absence of health reform. Estimates from the Urban Institute have produced similar results.

Full Report: Some Recent Reports Overstate the Effect on State Budgets of the Medicaid Expansions in the Health Reform Law (PDF | 304 KB) 

Center for Budget and Policy Priorities. (2010). Some recent reports overstate the effect on state budget of the Medicaid Expansions in the health reform law. Angeles, J.