OBJECTIVES: To date, no study has reported on the cost of treating breast and cervical cancer among Medicaid beneficiaries younger than 65 years of age.  This study estimates the incremental cost of breast and cervical cancer care among Medicaid beneficiaries under age 65. METHODS: Administrative data from the North Carolina (NC) Medicaid program linked with the state’s central cancer registry data from 2002–2004 were used to analyze total Medicaid costs for medically underserved low-income women aged <65 years diagnosed with breast and cervical cancer who are eligible for the Medicaid program and the incremental costs for breast and cervical cancer care at 6, 12, and 24 months from diagnosis. We used a two-part regression model to estimate the impact of breast and cervical cancer by stage at diagnosis on total Medicaid expenditures from time of diagnosis through 6, 12, and 24 months. All analyses were completed using SAS. RESULTS: The total incremental Medicaid costs (standard error) of treating breast cancer relative to no cancer at 6 months after diagnosis were $11,350 ($760), $20,227 ($1,146), and $28,911 ($3,422) for those with local, regional and distant cancers, respectively.  These costs increased 33.0%, 43.7%, and 50.6% at 12 months; and 39.3, 45.4, and 73.6% at 24 months, respectfully.  For cervical cancer, these costs were $11,995 ($2,043) and $20,753 ($2,299) for local and regional cancers.  These costs increased 30.4 and 18.6% at 12 months.  As expected, women whose cancers were detected at a local stage incurred lower medical expenses compared with women with invasive cancers. CONCLUSIONS: Our study shows that NC Medicaid beneficiaries with late stage cancers incurred higher medical costs that persisted for 12 months or longer after the date of diagnosis. Improved early detection of breast and cervical cancer among low-income women could potentially reduce the financial burden to the Medicaid program.