The federal government would pay for all of the increased costs under the expansion for the first three years, phasing down its share to 90 percent after that, which is still well above the average 60 percent share it currently covers for Medicaid.
"A lot is at stake for working families, for rural communities and for Tennessee businesses," Bonnyman said. "The governor and legislators are carefully studying those factors and will make a decision that isn't influenced one way or the other by today's announcement."
Even if the state declines to expand Medicaid, officials project an influx of people who are eligible for coverage but hadn't previously signed up. About 46,700 people are expected to join TennCare in 2014, at a cost of $56 million.
While Republican governors were once mostly unified in their opposition to expanding Medicaid under the health care law, six Republican governors have now proposed to accept federal dollars to expand the program to cover more low-income residents, citing the financial realities of their states' medical costs.
Associated Press writer Lucas L. Johnson II contributed to this report.