As part of a two-year, $5 billion deficit reduction plan, New York Gov. David A. Paterson is cutting nearly $500 million in Medicaid and other health and mental hygiene programs in the state.

David&nbspPaterson

Paterson announced the plan Oct. 15, as a move to cut $3 billion in the current budget year and $2 billion in the 2010-2011 budget year. The governor said over a five-year financial plan period, his plan would produce savings of $9.3 billion to help continue addressing the state’s long-term structural deficit.

The plan, which requires approval from state legislators, would not raise taxes, according to the governor.

Among the cuts proposed by Paterson is a $287 million reduction in Medicaid reimbursements and $184 million in cuts to hospitals and other health and mental hygiene programs statewide.

Kenneth E. Raske, president of the Greater New York Hospital Association, and George Gresham, president of the local United Healthcare Workers East, told the New York Times the cuts were “astonishing in their disregard for New York’s health care community and the patients they serve.”

Paterson’s plan also targets administrative actions, including more aggressive Medicaid fraud initiatives to generate $150 million in savings for the state.

Other parts of the governor’s plan include cutting $480 million in state aid to school districts, $28 million in cuts to social services programs and a $125 million in cuts to transportation programs.

The move comes less than a month after Paterson announced $500 million in state agency spending reductions, including cuts of $1 million from the Medicaid Inspector General’s Office and $26.2 million from the state’s insurance department. Paterson called those actions “an important first step,” but adding he needs the help of the state legislature to eliminate New York’s deficit.

“During a time of uncommon difficulty, we need to work together for the common good and enact a consensus plan that helps us avoid the severe consequences faced by other states that failed to swiftly address their budget problems,” Paterson said in a statement. “This will mean hard and painful choices, but that is exactly the type of leadership New Yorkers deserve from their public officials.”