New York’s Medicaid program would see $2.5 billion in cuts under a $178 billion state budget proposal outlined Tuesday by Gov. Andrew Cuomo. Increasing costs in the program are due in part to costs related to managed long-term care, according to the governor.

Cuomo announced that he would be creating a new “Medicaid Redesign Team” to reform the current Medicaid system and “identify $2.5 billion in savings this year by finding industry efficiencies or additional industry revenue with zero impact to beneficiaries” by an April 1 budget deadline.

The task force will be chaired by Northwell Health President and CEO Michael J. Dowling and labor leader Dennis Rivera and is expected to include other representatives from the healthcare industry as well.

The governor also said he would “empower the Medicaid Inspector General to root out waste, fraud and abuse in the Medicaid system.”

Six million New Yorkers are covered by Medicaid, according to the governor’s office. It is the second-largest state Medicaid program in the country, after California’s, in terms of beneficiaries and spending, industry data indicate. The governor attributes increasing costs in the program to managed long-term care, the $15 minimum wage, increasing enrollment, and support to distressed hospitals, as well as a lack of financial incentive for local governments to control costs.

Under the governor’s plan, the state government would cover annual cost growth in Medicaid up to 3%. Anything more would be the responsibility of the counties and boroughs.