PHOENIX — A divided Arizona Senate committee voted early Wednesday to eliminate the cash-short state’s Medicaid program and replace it with a much smaller system that would cover only a fraction of low-income people now served.

The Appropriations Committee voted 8-5 to drop the program, known as the Arizona Health Care Cost Containment System.

The program serves approximately 1.3 million people, or roughly one of every five Arizonans. A replacement envisioned in the bill would serve up to 100,000 people, including the seriously mentally ill and people needing long-term care.

The bill goes to the state full Senate after a legal review and discussions by party caucuses, but its prospects for passage were unclear. The vote happened in the wee hours of Wednesday morning after a marathon session dominated by immigration bills.

Gov. Jan Brewer, who has proposed that 250,000 people be dropped from program eligibility because of the state’s budget troubles, said Tuesday she wanted to protect care for the 1 million or so who would be left in the program.

The bill’s sponsor, Republican Sen. Andy Biggs, R-Gilbert, said AHCCCS is financially unsustainable because it serves too many people and strings put on the program by the federal government make it too costly.

Despite that, “there isn’t anybody that’s seriously talking about reform,” he said. “This is the solution that I’m bringing to the table.”

Dropping Medicaid would cost the state about $7.5 billion in federal funding.

Opponents of the bill said the funding loss would devastate the health care system and lead to hospital closings, particularly in rural areas.

“We’re going to see a real influx of demand for uncompensated care in hospitals and our emergency rooms,” said Sen. Kyrsten Sinema, D-Phoenix.

While all of the committee’s Democrats and one Republican voted against the bill, several of the Republicans who voted for it expressed unease at the prospect of actually making the major change envisioned by the bill.

Some of those lawmakers, however, said it’s clear that something must be done.

“We’ve got to be serious about this or we’re going to tax people to death” to support the current system, said Sen. Sylvia Allen, R-Snowflake.

Sen. Rich Crandall, a Mesa Republican who voted against the bill, predicted dire consequences if AHCCCS is eliminated.

“By Christmas time, there will not be a rural hospital open in the state of Arizona,” he said.

Prospects for Brewer’s own proposal advanced last week when U.S. Health and Human Services Secretary Kathleen Sebelius said Arizona has leeway to implement Brewer’s proposed eligibility reduction on Oct. 1 if the proposal is part of the state’s application for routine reauthorization for the state program.

Brewer’s AHCCCS director, Tom Betlach, told a House committee last month that full repeal would leave the state without enough money to provide care for anybody other than people receiving long-term care.

Elimination, Betlach said, “is not really a viable option.”

Texas officials reached the same conclusion when lawmakers in that state broached the idea of repealing Texas’ Medicaid program because of budget troubles.