Small mucinous cystic neoplasms (MCN) of the pancreas are managed with operative resection in otherwise healthy patients; however, postoperative diabetes development is not considered in recommendations for resection. Via probabilistic microsimulation Markov modeling, we assessed clinical and economic implications of laparoscopic distal pancreatectomy (LDP) versus surveillance for non-DM patients with suspected MCN of 2 cm without high-risk or worrisome features. Primary outcomes included quality-adjusted life years (QALYs), medical costs (2021 USD), and incremental cost-effectiveness ratios (ICERs). We conducted sensitivity analyses to evaluate the robustness of our model to changes in input parameters. All analyses were repeated for a population with pre-DM. Surveillance resulted in 6.52 QALYs and $61,200, while LDP accumulated 6.12 QALYs and $63,700. Almost 20% of the LDP cohort developed DM over the first 10 years, compared to 11% of the surveillance cohort. In a pre-DM cohort, LDP remained Dominated in the base case, with over 40% developing DM postoperatively. In sensitivity analyses, surveillance remained the preferred strategy in most iterations for both cohorts. Surveillance for small suspected MCNs without high-risk features is the preferred strategy from a clinical and economic standpoint. Consensus guidelines should consider the long-term implications of postoperative diabetes development following LDP.