By R.H. Melton
Washington Post Staff Writer
Wednesday, April 8, 1998; Page B01

RICHMOND, April 7—A combative Gov. James S. Gilmore III (R) used his veto power for the first time today to kill a bipartisan plan crafted by the General Assembly to provide health care coverage to more than 70,000 uninsured children.

Gilmore said the state should rely on private insurers, rather than a program administered by Medicaid, for coverage that Democratic and Republican legislators say would provide basic care for poor children.

The governor said the legislative plan improperly expanded benefits to middle-income families earning as much as $45,000, tying them to an antiquated entitlement program.

"I just can't be a part of any legislation that hurts our children and shackles our families with government dependency," Gilmore said. "The bill that's before me today embraces the failed big-government policies of yesterday.

"This legislation affronts my philosophy."

Gilmore had threatened the veto early last month after bipartisan coalitions of lawmakers rebuffed a breakneck lobbying campaign by his aides and passed a historic expansion of benefits to help uninsured children. Their measure passed by comfortable margins, but Gilmore advisers said privately today that they believe they have enough Democratic defections to win passage of Gilmore's alternative proposal.

The House of Delegates and state Senate, recently adjourned from the winter session, are scheduled to return to Richmond in two weeks for a session to consider overriding Gilmore's vetoes. Two-thirds votes in the 100-member House and 40-member Senate are required for veto overrides.

Although Gilmore dismissed opposition to his plan as little more than "ideological," Northern Virginia legislators from both parties promptly criticized his action.

Led by Sen. Jane H. Woods (R-Fairfax), chairman of the Senate's key health committee, Sen. Janet D. Howell (D-Fairfax), and Dels. John H. "Jack" Rust Jr. (R-Fairfax) and James M. Scott (D-Fairfax) joined together to remind Gilmore that 90 organizations, such as the March of Dimes and the Jewish Community Council of Greater Washington had embraced the legislative plan.

"Please Governor Gilmore, do not step away from this unique opportunity," the lawmakers said in a statement.

The group said that $68 million in federal funds available for child benefits would likely be sent to other states if Virginia fails to adopt a plan quickly.

"Do we really want our Virginia tax dollars buying eyeglasses for children in Atlanta but not Annandale, mental health services for children in Peoria but not Portsmouth, hearing aids for children in Rochester but not Richmond?" the group said. "Respectfully no."

Gilmore says he agrees Virginia should claim its share of the federal money but by creating his less generous plan.

The legislature's plan would provide Medicaid-style benefits to families with incomes as high as $45,000 and includes special provisions for state government employees. Gilmore wants to use private insurers to provide benefits to families making as much as $32,000 and would not provide special coverage for state workers.

Rep. Thomas J. Bliley Jr. (R-Va.), in Richmond at a Capitol news conference for Gilmore's veto announcement, said it "certainly never was the intention for states to lose money" should they fail to craft a benefit program right away.

Bliley said he will sponsor legislation making it clear that states won't risk losing out if it takes them longer than a year to agree on an approach. Bliley noted that he conferred just last week with Illinois Gov. Jim Edgar (R), who is having a similar tussle with that state's legislature over child benefits.