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About 20 percent of residents covered by West Virginia's Medicaid program could lose their benefits.
Cuts being proposed by the Bush administration could cut $156 million dollars in program expenses, much of it being used for health care.
West Virginia has already led the nation in cutting welfare benefits, and has been recognized for its leadership role.
The state has about 374,000 children, elderly and disabled people and low-income adults on Medicaid, but 71,000 are considered "optional."
State Medicaid Commissioner Nancy Atkins says it breaks her heart, but the state has no choice but to look at cutting services to the state's optional population.
Mostly affected will be the elderly in nursing homes.
State nursing home and hospital officials say any cuts in reimbursement rates could cause health care costs to increase and lay offs.
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