By Martha Heberlein

Earlier this week, the Kaiser Commission on Medicaid and the Uninsured and the Urban Institute released updated estimates of the cost and coverage implications of the Affordable Care Act’s Medicaid extension. These numbers are particularly helpful as states weigh whether or not to extend Medicaid to low-income adults.

The big picture – if the Medicaid extension is implemented in every state, the number of uninsured would decline by 48%, as an additional 21.3 million people would gain Medicaid coverage. Given the generous federal matching rate, costs to the states would increase by just 3%. A pretty good deal in my mind.

Importantly, even if states choose not to extend Medicaid, other provisions of the ACA (such as the “no-wrong-door” approach to eligibility) will increase enrollment and spending in Medicaid. This growth, however, will come solely from those who are already eligible for coverage and receive the state’s regular matching rate. As such, with no offset from the “newly eligible,” states will pay a higher share of the increased cost. Because of this welcome mat effect, the actual incremental costs of adopting the expansion is pretty tiny – just 0.3%.

And let’s not forget the savings! As states would spend less on uncompensated care as a result, extending Medicaid would actually save $10 billion over ten years. (Note that the Kaiser/Urban report didn’t take into account all potential state savings. For more on where states can save, check out our recent report on whether Florida should extend Medicaid.)

As with all things Medicaid, the numbers vary by state. For a full accounting of spending and enrollment, be sure to check out the tables in the report.