North Carolina would get about $514.6 million less than expected from the federal government in the first year of a Medicaid cost-cutting plan, according to a national advocacy group.

Families USA calculated the reduction in its first year would cost 11,700 North Carolina jobs and $412.1 million in lost wages. The group considered how federal spending ripples through the economy in its calculation of job losses.

To cut Medicaid costs, the Bush administration has rewritten the rules to limit payments to hospitals and eliminate federal funds for school-based outreach, among other changes.

"It's just a drastic reduction in Medicaid services at a time when people are struggling," U.S. Rep. David Price, a Chapel Hill Democrat, said during a teleconference Tuesday. The House is scheduled to vote today on a bill that would put the changes on hold until next year.

Hospitals have been lobbying hard to get Congress to stop the changes, stressing the threat to hospital survival and the health of poor patients. The state hospital association has estimated that 3,000 to 6,000 hospital jobs could be lost. Hospitals in the Triangle worry about losing tens of millions of dollars a year.

Medicaid is the state-federal insurance program for the poor and disabled, where the federal government pays about two-thirds of the costs. With a cut in federal funding, said Ron Pollack, executive director of Families USA, the state will have to decide whether to reduce services or pick up all the costs. "It puts the state in a very difficult situation," he said.

But in congressional testimony last year, Dennis G. Smith, federal Medicaid director, said the rules were a response to states' pushing more costs onto the federal government and asking for more money than they're owed.

In North Carolina, state officials realized in 2003 they had overpaid hospitals by hundreds of millions of dollars through the same program the rule changes target. In 2006, North Carolina and 51 hospitals agreed to repay the federal government $151.1 million for six years' worth of excess Medicaid charges.

Dan Gerlach, Gov. Mike Easley's senior policy adviser, said the changes would add to the financial burden on hospitals and endanger a state plan to convince more of them to care for mentally ill patients.