We can save billions while extending health care coverage to millions of Americans.

Medicaid is already the nation’s primary source of health care coverage for low-income children and families, and now it’s one of the two main building blocks for expanding national health care coverage. The program is estimated to grow by 16 million people once reform is in full effect, with enrollment in 10 states to increase by more than 50 percent.

Expanding Medicaid to all of these new people is expected to cost more than $430 billion over the next ten years. Though the federal government will fund most of the initial expense, the cost of keeping the program going will put major pressure on states, where Medicaid is already the second largest budget item.

The good news is there’s a way to cut a big chunk of those costs while ensuring that underserved populations can readily access better quality care. By building on what already works and fixing what doesn’t, we can save billions in Medicaid spending.

In our research at UnitedHealthcare, we’ve found that by taking steps to modernize the Medicaid program, state and federal governments can save an estimated $366 billion over the next decade. States’ $149 billion share of the savings would go a long way toward alleviating budget pressures.

It’s all outlined in our newest research paper, Coverage for Consumers, Savings for States: Options for Modernizing Medicaid. The report shows how states can expand access to higher-quality, well managed health care, increase funding for primary care physicians and cut overall costs, based on proven approaches already adopted in some states. Our set of best practices focuses on three categories:

• Broader use of coordinated care techniques to improve access to high-quality care for both existing and expanding populations of Medicaid-eligible Americans, with projected savings of $93 billion ($36 billion for states).

• Greater use of managed care to support people with long-term care needs, with projected savings of $140 billion ($60 billion for states). Examples include targeted home-and community-based care programs to support people living longer in their own homes, and better coordination between Medicaid and Medicare.

• Modernizing Medicaid’s administrative and transactional processes, with projected savings of $133 billion ($53 billion for states). Examples include applying new health IT systems, including Medicaid in-state health information exchanges, encouraging electronic claims submission, and validating claims prior to payment.

If we can implement these innovations more widely across the Medicaid program, we can not only help make sure Medicaid is sustainable for future generations, but also reinvest our savings in improving the health care system for all. More on that next time!