"You will find us joining hands with national governors across the country in trying to protect Medicaid funding," said new Utah Department of Health Director David Sundwall, who advises Huntsman on state Medicaid policy.

Sundwall, who will appear before state lawmakers Monday for the first of three budget hearings, says the Huntsman administration is excited by the former governor's ascension to oversee the nation's largest health care program. He applauds Leavitt's call for greater state flexibility administering the jointly funded program that serves more than 200,000 low-income children, seniors, people with disabilities and other Utahns not covered by private medical insurance coverage.

But Utah leaders will be stressing to Leavitt that greater flexibility should not mean greater liability.

"It's going to be a tough sell for the administration because states have depended so long on those funds," said Sundwall, a Utah native who has spent the last 23 years in Washington working in various public and private health policy jobs, including administrator of the federal Health Resources and Services Administration and as an aide to Sen. Orrin Hatch, R-Utah.

"We have our respective constituencies to serve," said Sundwall. "Mine is the people of Utah and Gov. Huntsman and [Leavitt's] is President Bush, and defending administration policies in concert with OMB [the Office of Management and Budget]."

With Medicaid now making up an average of 22 percent of state budgets nationwide, the stakes are high in the looming spending standoff between governors and the White House. This year, Utah will spend more than $1.4 billion on Medicaid, with Uncle Sam picking up more than $1 billion of that tab, under a formula of contributing $2.59 for every dollar the state kicks in.

The Bush administration will likely propose to cut or cap the federal contribution level when the White House unveils its budget request Feb. 7. Last year, the administration proposed cutting Medicaid spending by $20 billion for 2005, but Congress rejected the request.

This year, Republican budget writers say, they will try to squeeze down Medicaid spending by loosening restrictions on how states use the money.

Leavitt's expected role shilling for the administration's proposed Medicaid cuts contrasts to his previous opposition as governor against caps, although he maintained during his Senate confirmation his views have not changed. Appearing before a Senate panel in 1997 on behalf of the National Governors Association, Leavitt testified: "The governors adamantly oppose a cap on federal Medicaid spending in any form."

But during questioning by senators leading up to his confirmation last week, Leavitt pledged only to oppose limits to spending on "mandatory" beneficiaries, the most needy people Medicare must cover. Leavitt would consider proposals to cap "optional" benefits, such as dental or vision, and limit coverage of "optional populations" - people who have no health insurance but are not poor enough to qualify for mandatory coverage. Approximately two-thirds of all Medicaid recipients are "optional" beneficiaries.

"I believe [in] the need to have a sensitive and sometimes awkward but very important discussion with the state partners about real commitments and real dollars," Leavitt said during his confirmation hearings. "Some of it needs to happen fairly soon."

Advocates for low income people are sounding alarms that Leavitt will be the trigger-man for Republican-led efforts to dramatically downsize federal support to Medicaid.

"He's shown he's willing to radically alter the program in ways that would cause significant harm to people who depend on it for their health care," said Ron Pollack of Families USA. "We are about to enter the mother of all battles on the future of Medicaid." Democrats in Congress have vowed to oppose attempts to slash Medicaid funding, especially when enrollment in the program is swelling as unemployment and the sluggish economy pushes more people into poverty.

"We're going to send a very clear signal that, yes, there can be legitimate improvements made in both Medicaid and Medicare, but trying to put them on a glide path toward extinction, confusing recipients, administrators and others is something that is not in keeping with America's ideals and values," Sen. Hillary Rodham Clinton, D-N.Y., said Thursday at a national conference on health care.

Sundwall fears needed reforms to enhance and expand Medicaid coverage will get lost in partisan battles.

"I admire Governor Leavitt for not giving into pressure from Democrats to keep Medicaid as it is, because that would be irresponsible," he said. "It's a shame, although it's nothing new, that both sides may try to make a partisan issue out of what should be a solution-driven process. But trust me as a doctor: Democrats do not have any bigger hearts than Republicans do."