Md. Pushes Expansive Medical Coverage

"We can provide better care," Hammen said. "Health care is becoming more unaffordable in every community."

The state would subsidize small businesses to encourage them to provide coverage for their employees. And workers earning more than four or possibly five times the poverty level would have to buy insurance if their employer does not offer it. If they don't, they would face a penalty, possibly the loss of a personal income tax exemption.

Even so, the plan would leave about 500,000 people in the middle without easy access to health care. None of the proposals would cover illegal immigrants.

Insurance companies would be asked to offer a bigger menu of policies at affordable premiums. Under O'Malley's plan, small businesses would set up accounts for their workers to use tax-free dollars to buy coverage.

Hammen said he is still working out cost estimates, but his bill would rely on some federal money, a cigarette tax increase and, eventually, a reshuffling of Maryland's practice of reimbursing hospitals for the free care they now provide to the uninsured. The $700 million fund for uncompensated care would shrink as more residents have insurance, he said.

"Cost is an issue," he said, "but we have the potential of using money that's already in the system."

A $1-a-pack increase in the tobacco tax also is the centerpiece of an effort by the Maryland Citizens' Health Initiative to expand health care access through Medicaid and drug treatment. Although other states have approved tobacco tax increases to pay for health care, Senate President Thomas V. Mike Miller Jr. (D-Calvert) has expressed concern that if the tax acts as a deterrent to smoking, the revenue source could plummet.

About 14 percent of Maryland residents have no insurance, far lower than California's rate of 20 percent.

In the District, where about 13 percent of residents are uninsured, leaders last year agreed to subsidize coverage for children whose families have incomes up to three times the federal poverty level, including those who are undocumented.

"It's ridiculous to talk about two sets of kids," said D.C. Council member David Catania (I-At large), who estimates that the move could add several thousand children.

The District also is seeking federal permission to make more lower-income residents eligible for a subsidy that essentially provides free prescriptions.

In Virginia, 15 percent of the population has no coverage, including one in five adults. Gov. Timothy M. Kaine (D) has proposed providing prenatal care to more low-income women. A state health reform commission is studying greater access to care.

Maryland lawmakers acknowledge they're taking on a complex, costly effort. "We haven't touched a fiftieth of the pieces here," said Sen. Thomas M. Middleton (D-Charles) , chairman of the Senate Finance Committee.

Staff writer Susan Levine contributed to this report.