THE PERCENTAGE of children in the country lacking health insurance continues to rise. The increase has lately been sharpest among poor children. The trend persists despite a still-young program the president and Congress created in 1997 to reverse it. A principal culprit appears to be the welfare crackdown the president helped set in motion the year before.

The goal of the legislation was to trim the welfare rolls by stepping up pressure on recipients to work. The law and a strong economy have combined to reduce the rolls dramatically. The problem is that, in leaving welfare, many families also have fallen out of Medicaid, to which welfare recipients are entitled automatically. The legislation anticipated and sought to avert that side effect by extending the families' Medicaid eligibility. But as part of the shedding of federal responsibility that was a central theme of the exercise, it was left to the states to see to the "delinking" of the two programs, whereby families who left the one would remain enrolled in the other. The loosely supervised states have done what at best could be described as an uneven job. In 1994, 53.5 percent of children in families with incomes below the federal poverty thresholds were enrolled in Medicaid. By 1998, the figure had fallen to 45.9 percent. In 1994, about 25 percent of poor children were uninsured; four years later, it was 30 percent.

The reform bill set aside a half-billion dollars to help the states reprogram computers, retrain their employees and take other steps to make sure welfare "leavers" didn't lose Medicaid. As of June of this year, the states had drawn down only about 10 percent of that. Virginia had consumed about a third of its share; the District and Maryland had used zero. Maryland and the District now are both said to have begun drawing on their shares. Maryland, meaning the Glendening administration, had been threatened with a lawsuit by welfare rights advocates if it failed to act to keep eligible families in the program. (The District's statistically supported argument is that its Medicaid program is so heavily subscribed that it had trouble figuring out how to use the additional federal funds).

Congress, meanwhile, apparently has decided to extend the availability of the funds, which were in danger of lapsing. The extension will be included in other end-of-session legislation. It's the right thing to do. Welfare reform, whatever it means, ought not mean increasing the number of households in the country without health insurance. Both parties should be able to subscribe to that.