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And I'm Ari Shapiro.

Florida's legislature begins its annual session in Tallahassee today. Like many states, Florida faces a huge budget gap. Lawmakers hope that cuts in Medicaid will help close that hole. The program gives health insurance to the needy, makes up a big chunk of most every state's budget. As part of our series following Florida's budget process, NPR's Greg Allen reports on how the state hopes Medicaid cuts will save a billion dollars a year.

GREG ALLEN: The head of Florida's Senate, Republican Mike Haridopolos, introduced a plan to overhaul the state Medicaid program this way.

State Senator MIKE HARIDOPOLOS (Republican, Florida): We want to make sure, first and foremost, that it is a system that is improving the quality of care, improving the access to care. And then and only then, we'd start looking at costs.

ALLEN: In fact, there is really one thing driving elected officials here in Florida and in many other states to take a hard look at Medicaid and that's the price tag. Ten years ago in Florida, Medicaid cost $9 billion. Last year, it had risen to more than $22 billion. More than half of that cost is picked up by the federal government. But Florida's share still amounts to nearly a third of the state's budget.

To bring down that cost, Florida's legislature is planning to dramatically revamp the way the state delivers health care to those on Medicaid.

State Senator JOE NEGRON (Republican, Florida): We want to get out of the check-writing business and into the contract-compliance business.

ALLEN: State Senator Joe Negron has put together a plan that would scrap the old fee-for-service model and replace it with managed care. Negron want to negotiate contracts with health care providers, which would agree to deliver care to the state's three million Medicaid recipients for a predetermined fee. Negron says it would give the legislature a way to effectively cap what it spends each year on Medicaid.

Senator NEGRON: We're going to decide how much we want to spend on Medicaid. We're the appropriators and we're saying that the state agencies that work with us in implementing, they do not have the authority to spend beyond what we appropriate.

ALLEN: From a budgeting standpoint, it's an attractive idea. It passes off the responsibility for controlling costs, and the risk of busting the health care budget, to private contractors.

But it also means that Medicaid recipients may be seeing fewer benefits. At a time of tight budgets, Republican State Senator Steve Oelrich said, in a recent hearing, that's inevitable.

State Senator STEVE OELRICH (Republican, Florida): Just like the triage nurse separates the sore throat from the stroke and the heart attack, what we've had to do here is take our limited resources and apply them where they can be most effective.

ALLEN: Republicans control the governor's mansion and both chambers of the state legislature, so it's clear some version of Medicaid reform is likely to pass. That doesn't mean Democrats are going along quietly. Democrats like Representative Joe Gibbons.

State Representative JOE GIBBONS (Democrat, Florida): And the story they give you is, you know, we have to treat this like we do our family checkbook at home. And I'm sorry, but I'm really tired of hearing that story.

ALLEN: In Hollywood, Florida last week, Democrats held a workshop looking at some of the proposed changes in Medicaid. Gibbons rejected the idea that with shrinking revenues spending on Medicaid would have to be capped, whatever the consequences.

Rep. GIBBONS: If my family checkbook at home is short, you know what I do? I get a second job. I don't eat three days instead of seven. I get a second job. What they're telling us we've got to do is you got to eat three days.

ALLEN: It will be weeks until the Florida's legislature finalizes its plans to overhaul Medicaid. But for many Republicans, the future can be found here in Hollywood, Fort Lauderdale and other communities in Broward County.

For the past five years, nearly all Medicaid recipients in this county have been part of a pilot program that puts them in privately run managed care plans. Many in the legislature now want to expand that program statewide. At the workshop in Hollywood, a succession of doctors, care providers, advocates and Medicaid patients all had the same message: Managed care has been a disaster.

Mr. RICHARD STEIN: My friend has had four plans in four years. She's had to change doctors every year.

ALLEN: Richard Stein is a retired lifeguard who came to speak on behalf of a friend, Cynthia Bowersox. Bowersox is homeless and has multiple health problems.

Mr. STEIN: She currently has throat cancer. It has taken four months to get a biopsy on the throat cancer due to the impediments placed by the HMOs for authorizations.

ALLEN: Moving more Medicaid recipients into managed care is something that's been happening not just here in Florida, but in almost every state in the nation.

In Broward County, critics say the experiment with privately run managed care often reduces access and benefits for those on Medicaid. Those charges will be considered by the Obama administration when it looks at whatever new Medicaid plan Florida comes up with.

If the administration doesn't approve, some Republicans in the legislature say Florida should drop out of Medicaid. They say the state would then provide care for some three million of its poorest residents with whatever resources are available.

Greg Allen, NPR News, Miami.

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