Whetten Reed, 37, has a master's degree, a wife and four children and is unemployed. Although he wants to work, he has turned down three $20,000-a-year jobs in the past several months.

Reed, an agricultural economist who lives in Takoma Park, rejected the jobs because his potential employers' health plans would not cover his 10-month-old son, John, who was born with multiple birth defects.

The way Reed figures it, unless he can find a job with a health plan that covers his son, he will lose the protection he now gets from Medicaid, the government insurance for the unemployed and the poor. And if he doesn't have some form of comprehensive insurance, he will be faced each month with thousands of dollars of hospital and doctor bills.

"I guess," said Reed, "I'm in a Catch-22."

Social workers from hospitals and state organizations say Reed's problem is not unusual among parents who have children with birth defects. Each year in Maryland, dozens of parents have the same problem, according to a spokesman for the Maryland Developmental Disabilities Council. Unless they have low enough incomes to qualify for Medicaid, they can be faced with enormous doctor and hospital bills.

In such cases, the parent ordinarily pays according to his ability, and the hospital writes off the balance. But the Reeds, who have run up more than $100,000 in bills at Children's Hospital, do not want the hospital to be stuck.

"We feel as though if insurance won't pick up the bill, we'll pay a certain amount for the rest of our lives," said Reed's wife, Diana.

The Reeds' infant son, John, was born in February with paralyzed vocal chords, which do not permit air to get into his lungs. Soon after he was born, when a nurse noticed he was turning blue, surgeons implanted a tube in the baby's neck that permits him to breathe.

In addition to paralyzed vocal chords, the infant was born with a genetic deformity that prevents him from raising his arms or moving his shoulders, which come almost to his ears. The child also was born without thumbs, and is deaf in one ear.

The Reeds must give him constant, almost undivided attention.During the six months he has been home, he has stopped breathing eight times because mucous accumulated in his lungs. Each time, firefighters arrived with oxygen, and the baby was taken to the hospital.

Yet, he is a happy baby, who gives broad smiles and kicks his legs when he sees his parents, his three sisters or any visitor.

In addition to their financial worries and their anxieties about their baby's health, the Reeds also worry they are not giving the rest of their children enough attention. Their biggest hope is that the baby's vocal chords someday vibrate, permitting him to speak and to breathe without a tube in his throat.

"All his other problems seem minor in comparison," said Reed.

Since February, when John was born, and May, when he left the hospital, he ran up $91,000 in hospital and doctors' bills. All those bills were paid by the insurance company that Reed had at the time, Mutual of Omaha.

But in May, Reed's contract as a $25,000-a-year trainer for Peace Corps volunteers ended, and his insurance coverage stopped also.

Reed thinks of May through November as the bleakest part of his life. His son's hospital and doctor bills totaled about $25,000, yet he did not have either insurance or Medicaid coverage.He applied for Medicaid coverage, but was told he did not qualify because his family had too much money, thanks to his $181-a-week unemployment check, his $3,000 in savings and $3,000 worth of stock.

He applied again, and was again rejected.

"I got panicky," Reed said.

Finally, a supervisor at the Medicaid office agreed to look over Reed's file. He began receiving Medicaid payments last month. The payments will be retroactive to June, and take care of the $25,000 in doctor and hospital bills his son has incurred since then.

Reed is now trying to find a job that has an insurance plan that would pay for his son's doctor and hospital bills, and perhaps also for a nurse to care for the baby in his home. Several consulting firms offered him jobs in his field, but their health plans considered Reed's child a high risk, and would not accept him.

Reed is now going to try to find a job in the federal government, where he is hoping the health plans will provide insurance for his son. If he does not succeed, he plans to take a job without such insurance, and pay Children's Hospital whatever he can afford.

But then he would face another problem.

He says he would have to hire a nurse to help his wife care for the baby. A nurse's salary would be about $400 a week -- almost as much as his own. CAPTION: Picture 1, Whetten Reed and wife, Diana, with son, John, who is using a tube to breathe. By James M. Thresher -- The Washington Post; Picture 2, The Reeds have run up over $100,000 in hospital bills for 10-month-old John.