Gov. John Lynch is one of several governors raising concerns about the health care reform proposals being debated in Congress. Specifically, Lynch is worried that a plan to expand Medicaid, the government-run insurance program for the poor and elderly, will saddle state budgets with hefty costs.

Pam Walsh, Lynch's deputy chief of staff, said the governor supports the larger goal of expanding health care coverage, but he doesn't think states should be stuck with the bill.

"We're struggling with our current Medicaid program, which has seen a big increase in demand over the past year," Walsh said. "We can't afford to absorb new costs."

New Hampshire now offers Medicaid coverage to the following groups: low-income children, pregnant women, elderly individuals and people with disabilities. Parents are covered, too, if the family earns less than 63 percent of the federal poverty level (or about $13,900 a year for a family of four). But several proposals before Congress would require all states to extend Medicaid coverage to anyone who earns less than 133 percent of the poverty level. That comes to $14,400 for an individual, or about $29,300 for a family of four.)

Because the bills differ on the details, it's hard to say what the precise impact of such an expansion would be on New Hampshire. According to figures from the National Conference of State Legislators, the Medicaid expansion proposed by the Senate Finance Committee could cost New Hampshire $177 million over the first six years of the program, starting in 2014. Those costs would come from the approximately 83,000 people who would be newly eligible for Medicaid in New Hampshire by raising the program's income limit.

The federal government picks up half of New Hampshire's Medicaid costs. To help soften the blow of the proposed expansion, Washington would increase its portion to about 85 percent, at least in the early years of the expansion. Without that increased share from Washington, New Hampshire's costs could be about $700 million higher.

While it has gotten little attention in the larger debate of insurance reform, the plan to expand Medicaid is a key part of several reform proposals. Many advocates of insurance reform say expanding Medicaid eligibility to cover low-income adults would significantly reduce the nation's uninsured population. But the potential cost of that expansion has concerned New Hampshire officials who keep an eye on the state's Medicaid program.

Lisabritt Solsky, New Hampshire's deputy Medicaid director, said it's hard to calculate exactly how much expanding Medicaid would cost the state, since there are no good figures available on the number of uninsured poor people in the state. And, Solsky added, it's nearly impossible to figure out how many of them would apply for Medicaid and how much covering them would cost.

The only certainty, she said, is that expanding Medicaid would cost money.

"In broad brushstrokes, we know that adding tens of thousands of people onto the system is going to cost more," Solsky said.

New Hampshire spent $1.3 billion on Medicaid last year, or about 28 percent of all state spending. According to the state Department of Health and Human Services, more than 147,000 state residents were covered by Medicaid last year. The state spends an average of $677 a month for each person receiving coverage through Medicaid.

In addition to increased costs to the state's budget, there's another potential problem in expanding Medicaid: Many doctors and health care providers already refuse to accept Medicaid patients, since the reimbursement rates they get for treating those patients are so low. Expanding the size of Medicaid would likely make that problem worse.

"Our big fear is that by throwing that many more people into the system, we'll have to address the (reimbursement) rate structure to keep the system stable," Solsky said. "We need to keep health care providers interested in serving these people. And if the rates don't cover their costs, it's harder to keep them interested."

The stalled economy has resulted in big increases in New Hampshire's Medicaid rolls. In September, 114,862 people were served by Medicaid, a 10 percent increase over the same month last year. And the state received 6,159 new applications for Medicaid last month, an increase of 500 over August and a 14 percent increase over September 2008.

Rep. Cindy Rosenwald, chairwoman of the House Health and Human Services Committee, said she's concerned that the federal government would reduce its portion of the cost of expanding the program. But she said expanding Medicaid would bring other benefits to the economy and the health care system. Healthier people are more productive at work, she said.

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