Gov. Jeb Bush and other proponents say transferring responsibility to private health plans would provide better care, and control the escalating costs of the health insurance program.

"I'm very confident that we will have a system that will focus on health rather than sickness," Bush said Wednesday from Washington, where he and U.S. Department of Health and Human Services Secretary Michael Leavitt announced the decision.

"I think this will be part of a national debate about how to create a more sustainable Medicaid program."

Waiver from Existing Medicare Rules

However, critics of the pilot program say some Medicaid recipients may end up losing benefits.

AARP, the group formerly known as the American Association of Retired Persons, questioned the state's ability to implement such a large program.

"The administration wishes to trust big private insurance companies to handle this vital task," AARP state director Bentley Lipscomb said in a statement. "Someone needs to ask the hard questions about how Florida's least fortunate will fare."

Although most elderly people have health insurance through Medicare, a separate program, some are covered under Medicaid.

Leavitt signed Florida's waiver from existing Medicaid rules, but the plan still needs approval from the Florida Legislature. Bush said he plans to call a special session in December to consider it.

The managed system would be implemented in July in Broward and Duval counties to see how well it works on a limited basis before getting final federal approval to go statewide.

'A Lot of Resistance'

Florida spends 25 percent of its budget on Medicaid and the program's costs have been increasing at the rate of 13 percent annually. The health insurance program covers more than 2 million of the state's poor and elderly.

"That's not sustainable," Bush said. "There's not a source of revenue in our state that grows at that rate over an extended period of time."

Under the plan, Medicaid-eligible residents in Broward and Duval counties would be allowed to chose a healthcare plan, including health maintenance organizations and networks established by doctors and hospitals.

Some critics think the Legislature should take its time before approving the plan.

"I'm not sure what the rush is," lobbyist Karen Woodall, an advocate for groups that represent Medicaid patients, told the St. Petersburg Times. "I believe there are still a number of unanticipated changes that should lead the Legislature to put the brakes on this."

Others say they expect resistance from Medicaid users.

"A lot of people are frightened and they don't know what to expect," said state Rep. Eleanor Sobel, a Democrat from one of the test counties. "There's a lot of resistance."