The plan would cover working people who earn too much to qualify for federal Medicaid assistance, but too little to buy their own insurance or to pay their share of coverage offered by employers. The Whitman administration says it would all but eliminate the state's ballooning charity care bill and put poor people who now use the emergency room for the most expensive kind of treatment into a managed care program. About 80,000 working parents with children would be brought under the program by expanding Medicaid coverage to families with children where the families earn up to 30 percent above the poverty level, or about $18,500 a year for a family of four. Families earning up to $28,000 would be eligible for insurance under the plan, but would have to pay a premium based on their income. An additional 45,000 adults without children, including many General Assistance recipients, would also be enrolled in managed care programs under the plan. In a sense, the governor's proposal amounts to an early bid in the coming political debate over ways to spend $300 million the state is due to receive each year for 25 years under the Federal liability settlement with the tobacco industry, a total of some $7 billion. The governor has always maintained that the tobacco settlement should go for health care, but other members of the Legislature have other ideas. The speaker of the Assembly, Jack Collins, has proposed using some of the money for schools construction. At a news conference today, the governor repeated her view that money from a product that hurt people's health should at least in part be used to restore it. The program, which has been named New Jersey FamilyCare, would resemble the existing New Jersey KidCare program, which provides medical coverage for 53,000 children of the working poor. Details of the governor's proposal were first published in The Star-Ledger of Newark today. "I am committed to spending as much as possible in health-related matters, and we are working on a program that will provide health insurance for up to 125,000 working adults," Mrs. Whitman said. "We are particularly focused on what is known as the working poor." New Jersey KidCare is partly the creation of Donald T. DiFrancesco, the Senate president and a likely supporter of the Governor's plan. As described by State House officials today, the state's contribution of $100 million a year would generate an additional $43 million in matching Federal Medicaid grants. And by paying the employee contribution for workers who until now could not afford to pay it, the plan would also bring in about $25 million in new private employer funds for health care coverage. In addition, the $27 million the state currently pays for medical coverage of adults without children would be put into the FamilyCare program. Sean Hopkins, a health care finance expert with the New Jersey Hospitals Association, reacted favorably to the governor's idea. "Obviously the New Jersey Hospitals Association would support any and all plans that reduce the numbers of the uninsured," Hopkins said. He said the state's hospitals provide about $500 million in treatment for uninsured patients and receive only $300 million in compensation from the state for this care. Melanie L. Willoughby, director of the New Jersey Retail Merchants Association, whose members' contributions to employees' health care are crucial to the governor's proposal, reacted more cautiously, saying her group wanted to see more details.

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