ALBANY (AP) -- New York's major candidates for governor shared their ideas Monday for letting some air out of the Medicaid balloon in New York, which spends more on the federal health care program for low-income people than Texas, Florida and Michigan combined.

Republican Carl Paladino released a plan Monday that he said would reduce New York's "gold-plated" system to be more in line with other states. He promises a $20 billion cut in the $52 billion program.

Democrat Andrew Cuomo said in Buffalo that he will work with the health care interests to reduce the "unsustainable" level of spending and would target inefficiencies and fraud. If the health care providers don't cooperate - they've opposed past efforts - Cuomo threatened to simply cut spending.

New York's Medicaid program has grown from government health care for those on welfare to encompass millions more poor and working poor. Nearly one in four New Yorkers receive Medicaid services.

Over the years, lawmakers lobbied by powerful special interests, including hospitals and health care worker unions, have added optional coverage benefits to a program that has long been called the "Cadillac" of state systems.

In 2008, the most recent year of available comparisons, more populous California spent $10 billion less than New York on Medicaid. New York spent more than Texas, Florida and Michigan in total, according to the Kaiser Family Foundation.

Lt. Gov. Richard Ravitch, a widely respected expert on fiscal crises, issued a study last month that found the unwieldy system serves "contradictory goals and provides perverse incentives" and is "ill-equipped to control costs."

E.J. McMahon of the fiscally conservative Empire Center for New York State Policy said the state is already scheduled for a big cut when federal stimulus money runs out next year. That will create an immediate 20 percent reduction in funds, he said, while Medicaid inflation and the rising number of recipients are increasing costs 8 percent a year.

"Paladino deserves credit for recognizing that you can't reduce Medicaid costs unless you are willing to reduce the number of people eligible for Medicaid and reduce the array of services to which Medicaid-eligibles are entitled," McMahon said Monday.

Paladino's goal of cutting $20 billion immediately is implausible, he said, but his plan could save a lot of money over the course of years.

Paladino called Medicaid "probably the single biggest cause of New York's stagnant economy." The $52 billion cost is part of a $135 billion state budget that increased taxes and spending over the past two years.

He said his cuts would save state and local property taxpayers $10 billion in the first year. Paladino said the cut in the county contribution to Medicaid will allow for reductions in county taxes of more than 30 percent.

McMahon called Cuomo's plan "very vague and general."

"Cuomo's solution - 'make Medicaid more efficient' through various administrative reforms - is simply inadequate," McMahon stated in a review of the two proposals.

"We have the highest rate in the nation, and it is just not sustainable," Cuomo said Monday at the Roswell Park Cancer Institute.

He wouldn't detail any cuts but said he would "redesign the entire program," which he considers "fundamentally flawed." He said he would also take over administration from the counties.

And he said he would bring in the health care special interests that have pushed the Legislature to drive up the cost.

"I want to bring in the providers," Cuomo said. "I want to bring in people who are actually doing business with the state and say, 'Guys, we can't afford it anymore. We have to reduce the amount we spend on Medicaid; let's redesign the program together.'

"Otherwise," he added, "I'm just going to have to cut off the top, and that's not the best way to do it."

(Copyright ©2010 by The Associated Press. All Rights Reserved.)