Federal officials still have to sign off on the state's proposal and any contract Ohio enters into with the plans. The plans will also undergo a readiness test by the state to make sure they are prepared when enrollment begins on April 1.

Ohio Medicaid Director John McCarthy said he's looking forward to the state moving forward with its proposal. He said negotiations are ongoing with federal officials on the plan.

More than 182,000 Ohioans are enrolled in both Medicare and Medicaid. While they make up only 14 percent of total the state's Medicaid enrollment, they account for almost 40 percent of total Medicaid spending, according to state figures.

The proposal covers a portion of those in both programs, with the idea that it would expand to all the state's Medicaid-Medicare enrollees after three years.

The federal Medicare program serves the elderly and disabled, while Medicaid provides coverage for the poor though state and federal funding.

The two programs operate fairly independently of each other. Medicare generally helps pay for doctor and hospital visits, along with prescription drugs. Medicaid typically helps pay for long-term care, such as nursing homes, among other services.

As a result of the lack of connection between the two programs, some patients are more costly to the system, officials say.

For instance, a patient could be discharged from a hospital to a nursing home instead of to a less expensive home-based care because the two programs aren't talking to each other in the same setting.

The state wants to better link the two programs so that the beneficiaries only have to work with a single entity to receive the services.

Individuals would get a care manager to help them with medical decisions and to live independently if they are still at home.

"If they are 86 years old, living at home and cannot get out, then how is that different than being institutionalized?" McCarthy said. "So just living at home isn't the important part, you need to have those social interactions and be connected to the community. And that's a part of what we're trying to do with this project."

Ohio's plan is also designed to eliminate unnecessary health tests, prevent medication errors and keep people healthier and out of emergency rooms.

The three-year demonstration program could end up being a model for other states, officials who drafted the plan have said.

Ohio is hoping to become the second state after Massachusetts to take part in a dual-eligible project with the federal government, McCarthy said.