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Florida could become the first state to drop Medicaid coverage. The rising cost of the entitlement program costs Florida taxpayers 21 billion dollars a year. As Whitney Ray tells lawmakers are proposing changes to lower the cost and they plan to tell the feds take it or leave it.

Nearly three million Floridians rely on Medicaid for their health care at a cost of 21 billion dollars to Florida taxpayers. A little more than half comes from the feds, but in order to receive the matching dollars the state has to follow some rules.

Rules Republican lawmakers say cost the state too much money.

“The current system is unsustainable. We have a situation where Washington has really commandeered our state budget,” said Senator Joe Negron, the lawmakers in charge of the reform legislation.

Lawmakers will release a plan to reform Medicaid Thursday. It will force some recipients into managed care programs, eliminate some optional benefits and provide incentives to stop drinking and smoking.

“We say in the bill that we expect them to be engaged in a smoking sensation program that’s medically directed,” said Senator Don Gaetz, a Republican from Niceville.

Advocates for low income families support some of the changes, but fear reform will mean a major reduction in benefits.

“I’m not sure how you get to the reduction if you’re not cutting services,” said Karen Woodall, the Director of the Florida Center for Fiscal and Economic Policy.

Looming are changes brought on by the new federal health care laws that will require Florida to allow another two million people onto it’s Medicaid rolls.

Lawmakers fear that would ruin the budget. If the feds don’t like their plan for reform, lawmakers are prepared to tell Washington they no longer want to offer the entitlement program. Only some of the details about the reform legislation are known right now. The entire plan will be unveiled tomorrow in Tallahassee. It’s expected to cut Medicaid costs by a billion dollars next year.