Managed care is now a central feature of the Medicaid program in most states. However, managed care programs cover a relatively small fraction of total state Medicaid expenditures because the most expensive Medicaid enrollees (disabled people, people with expensive chronic illnesses, and people in long term care) usually remain part of the fee for service Medicaid program. Illinois is pilot testing a managed care program for disabled Medicaid recipients called the Integrated Care Plan (ICP). Starting in 2012, the ICP pilot replaced the standard Medicaid program for disabled Medicaid enrollees who lived in a set of suburban counties near Chicago. To evaluate the pilot program, we have been collecting claims and encounter data from the ICP enrollees and a comparison group of Medicaid recipients who met the eligibility criteria for the ICP pilot but who lived in Chicago proper rather than in the suburbs. Data are available from both groups from 2011 to present so that we have data on key outcomes can covariates from both before and after the start of the pilot program. We used inverse propensity score weights to ensure that the suburban and Chicago groups were comparable with respect to racial composition, age distribution, underlying health characteristics, and past health expenditures. Then we estimated difference in difference models using the data from the matched sample to estimate the effects of the pilot program on the costs to the state and on utilization of several different types of health services. Our analysis is ongoing, but preliminary estimates suggest that the pilot program actually increased the state’s costs of providing health insurance to disabled Medicaid recipients.