By David Morgan

WASHINGTON (Reuters) - With billions of dollars in Medicaid spending at risk in Congress, U.S. states are forming a loose confederacy to oppose any federal cuts that could damage state budgets already awash in red ink.

The "red" and "blue" states that mark America's political divide between conservative and liberal sympathies are often far apart on issues involving healthcare, including Medicaid, the $420 billion-a-year program for the poor.

But lobbyists say governors, legislators and other state officials, Republican and Democrat alike, have found common ground in a push to convince a special congressional deficit panel that White House-backed Medicaid cuts totaling $41 billion will only weaken a system that already struggles to deliver care to 60 million beneficiaries.

The 12-member bipartisan panel, dubbed the "super committee" because of its powers, is tasked with finding $1.2 trillion in savings to cut huge U.S. deficits. The full Congress is due to vote on their recommendations by late December.

State officials appear most unified on an alternative cost-cutting strategy, which they say could save more than $100 billion by changing the healthcare delivery system for the poorest, sickest and most costly patients. Known as "dual-eligibles," they qualify for both Medicaid and Medicare, the government-run program for the elderly.

There are about 9 million dual-eligibles and state officials see billions of dollars in savings from shifting them into managed care plans better able to eliminate unnecessary doctor's visits, tests and hospital admissions.

"Support for that proposition is very broad," Maryland Governor Martin O'Malley, who chairs the Democratic Governors Association, told Reuters.

States also hope the super committee will adopt proposals to control Medicaid prescription drug costs, combat waste and fraud, and relax federal restrictions on benefits and eligibility, lobbyists said.

HEAD IN THE SAND

The current lobbying effort is expected to reach critical mass in October, when Democratic and Republican governors are due in Washington for separate initiatives that include private meetings with super committee members.

Medicaid and Medicare are central to the deficit debate between Republicans in Congress and President Barack Obama, who has vowed to veto any bill that would require sacrifices from the old and frail while allowing the wealthy to avoid taxes.

Medicaid is also key to the success of the 2010 U.S. health reform law, the centerpiece of Obama's domestic policy agenda, which calls for coverage to be extended to 16 million uninsured Americans who currently do not qualify as beneficiaries.

States, healthcare providers and beneficiaries lobbied successfully last summer to spare Medicaid from automatic cuts that would be imposed if the super committee failed to reach agreement by November 23.

This time, states may be less unified on larger questions about the future of Medicaid because of partisan differences including a Republican push to repeal Obama's health reforms and convert Medicaid into a block grant program with few federal rules, both of which Democrats oppose.

But they are not only pushing back against potential cuts.

"That's a head-in-the-sand approach. But there are ways to look at Medicaid changes -- some of which would be helpful and some of which would make the problem worse," said Matt Salo of the National Association of Medicaid Directors.