"A 6.3 percent increase in required Medicaid spending in the face of declining revenues and in the face of cuts virtually everywhere else in the budget means Medicaid is still metastatic. It's dangerous. It's deadly. It's unpopular and it's growing," said Republican Sen. Don Gaetz.

He said cuts in services seem unavoidable.

"When there's less money coming in and greater demands for critical services how do you make the math work without raises taxes or cutting spending?" Gaetz said. Senate Pres. Mike Haridopolos has said he will not support raising taxes.

Critics say the state continues to exaggerate Medicaid spending costs to justify privatization.

"Legislative leaders have continuously misrepresented the growth in Medicaid spending in an attempt to justify budget cuts and privatization efforts that put the most vulnerable Floridians at risk," said Greg Mellowe, policy director of patient advocacy group Florida CHAIN.

Economists attributed the modest growth to a slight dip in caseloads, slowed utilization rates, benefit cuts and anti-fraud measures. Officials reduced Medicaid's 3.2 million caseload by 60,536 cases, said Amy Baker, coordinator of the Legislature's Office of Economic and Demographic Research. Many of those included the most expensive cases, she said.

The biggest savings was in home health care, a sector vulnerable to fraud. Baker said recent legislative changes, which require verification before home health services are delivered, have also saved money.

"What you're seeing here in part has to do with several changes that the Legislature made over the years. They're slowly working their way into the system," she said.

The state plans to slowly roll the privatization program out over two years beginning in July 2012, allowing officials to address problems along the way. Long-term care patients will be the first to enroll in the statewide program starting in October 2013.

Democrats and patient advocates worry the state is abdicating the health care of its most vulnerable populations to for-profit providers with little oversight from state health officials, who have said they did not track what services and medications were denied under the pilot program. There has been little data showing whether the pilot program saved money or improved patient care.

The state's Agency for Health Care Administration is in the process of negotiating the program's expansion with federal health officials. The Centers for Medicare and Medicaid Services signaled earlier this year it's willing to work with the state on the overhaul, but stressed Florida's plan must address concerns about patient care, transparency and accountability under the pilot program.

The agency is also pushing Florida lawmakers to include a provision in their Medicaid overhaul that would require private health plans to spend 85 percent of funds on patient care.

That issue has been a sticking point. Instead, lawmakers created a profit-sharing plan requiring providers to generate a 5 percent savings the first year, which could save the state about $1 billion. Texas has a similar program.

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Kennedy reported from Miami.