ALBANY – Governor Pataki will take a stab at Medicaid reform today by proposing to freeze at 2005 levels the spiraling payments that New York City and state counties make to the giant entitlement program each year.

The plan, as outlined by senior Pataki administration officials yesterday, features a 3% spending increase each year after 2008 to adjust for growth, and a variety of cost-containment measures that would result in a total savings to New York City of more than $375 million next year out of an overall statewide savings of $578 million.

New York City officials and state county executives have been perhaps the loudest critics of a Medicaid funding apparatus that leaves them – and local taxpayers – bracing for property tax hikes that are typically used to fund annual increases in the program’s cost.

But the proposal, which aides said would be outlined in the governor’s annual budget address in Albany today, will almost surely face opposition from health care lobbyists and others who fear that cash-strapped health care facilities will end up taking the biggest hit.

Mr. Pataki’s aides partly confirmed those fears by saying the governor’s Medicaid reform plan will include a new tax on hospital revenue and an increased tax on nursing homes. Total savings from these and other measures would reduce Medicaid costs by roughly $1.1 billion in the next fiscal year, the aides said.

According to the plan, hospitals would be asked to pay a tax of 0.7% on revenue; nursing homes would see a rise in their current revenue tax from 5% to 6%. The new and increased assessments would result in roughly $234 million in additional revenue.

The governor is also expected to: appoint a Medicaid task force that will seek to eliminate unused hospital and nursing home beds in the state; expand home health care; and attempt to cut loopholes by which those who can afford long-term health care have found their way into a program that was originally intended to assist those who can’t.

Passing a Medicaid proposal that will cap local spending and reduce annual costs won’t be easy. Many lawmakers agree that the program, which accounts for roughly 40% of the state’s $103 billion budget, is too costly and overly burdensome on local governments.

But others say lawmakers should not be targeting health care providers as a way to shrink its price.

“A loss of that size would be devastating to health care providers,” said a spokesman for the Health Care Association of New York, Matthew Cox. “If these are the figures he [Governor Pataki] is proposing, we’ll fight as hard as we possible can to prevent them from happening. We’re sympathetic to counties that are facing rising costs, but hospitals and nursing homes are not the ones driving up the costs.”

Local officials are not all expected to warm to the plan either. The Nassau County executive, Thomas Suozzi, a Democrat who has met privately Mr. Pataki and other state officials in recent weeks, said the proposal is likely to contain elements he won’t like.

“We’re going to have to see whether this particular cost-containment proposal makes sense,” Mr. Suozzi said. “I’m not sure that all of them will be acceptable.”

Aides to the governor framed the Medicaid proposal as a way of building greater predictability into New York City and state county budgets. They also touted the plan as flexible because of an option that would allow counties that expect their sales tax proceeds to grow more slowly than 3% annually to pay for their Medicaid costs from the sales tax pot.

Mayor Bloomberg has been a major force in the effort to transfer the local burden from Medicaid costs to the state, calling two years ago for a “political revolution to make Albany accountable for Medicaid reform.” A spokesman for the mayor, Jordan Barowitz, declined to comment on the governor’s Medicaid proposal. “We haven’t seen it yet,” he said.