The Patient Protection and Affordable Care Act (PPACA) will have substantial effects on state governments. There will be a dramatic expansion of Medicaid enrollment; however, in most cases the federal government will pay a very high share of the costs associated with the expansion. States who offer more limited coverage today will see the greatest benefits. The legislation should also reduce many costs that states now bear for caring for the uninsured. They could also save by no longer covering Medicaid beneficiaries with incomes above 133 percent of the federal poverty line (FPL); states are also likely to save on current coverage of children, and could see lower expenditures for elderly and disabled. States will also benefit from income-related subsidies that provide federal support to individuals with low and moderate incomes.