By: Danielle Ulman

Medicaid, the country’s safety-net insurer for low-income families and individuals, is on the verge of a massive expansion, taking on coverage of millions more Americans under federal health care reform.

Expansion of the program from 70 million people to 86 million people is expected to cost billions of dollars. States, which are already struggling with delicately balanced budgets, are bracing for impact.

But a new report from UnitedHealth Group is identifying ways the federal and state governments can reduce the costs of health care reform — mostly from Medicaid efficiencies.

United says that with an estimated 274,000 new Medicaid enrollments in Maryland, it will cost the federal government $5.5 billion and the state $520 million from 2014 to 2019.

But by modernizing Medicaid, the potential savings to Maryland are huge. Tweaking the system could save Maryland $2.9 billion and the federal government $3.2 billion from 2011 to 2019, according to United. In total, making the proposed changes could save the nation $366.1 billion.

So, how does United recommend we get these savings? Here are some of their ideas:

• greater use of coordinated care techniques to improve access to high-quality care for low-income Americans
• greater use of managed care to support people with long-term care needs
• upgrading of Medicaid’s administrative and transactional processes

Some states are already proving that these approaches work. Check out the report for a lot more details and some barriers to making these plans functional.