The spending in New York dwarfs that of any other state. Twelve percent of all Medicaid dollars in the country are spent in New York, even though the state has less than 7 percent of the nation's population.

New York is also one of the few states that makes localities pick up part of the cost. That drives up property taxes and is the reason county governments are screaming.

Making the problem worse, the federal government pays only 53 percent of the New York tab — a figure that is set to drop to 50 percent at the end of June, when a one-year supplement is due to expire. That will cost the state about $1.3 billion. Mississippi, in contrast, gets 80 percent of its Medicaid funding paid for by Washington.

State officials say the formula Washington uses to pass out Medicaid funds, which uses average wealth as a key criterion, should be thrown out. They point out that although New York has more rich people than most other states, it also has an above-average proportion of poor people (about 16 percent compared to the national average of about 13 percent.)

"It would be political malpractice to let the federal government off the hook,'' said James Tallon, the former Assembly majority leader from Binghamton who is now president of the United Hospital Fund, a Manhattan-based group that analyzes health care.

Further clouding the future of Medicaid in particular and all health care in general is that in 2011, the first of 76 million members of the baby-boom generation will turn 65 and put unprecedented stresses on the system.

"The debate now is: How is the baby-boom generation going to pay for the expensive years of its health care?'' Tallon said.