The Pawlenty administration, which faced criticism for proposing to eliminate a state health-care program for the indigent, has decided to transfer most of those recipients to a subsidized insurance plan for the working poor.

The General Assistance Medical Care (GAMC) program for adults making less than $7,800 a year is scheduled to go away March 1, potentially leaving some 36,000 recipients -- many with chronic illnesses and often homeless and mentally ill -- without regular access to medical care.

Now some 28,000 will be automatically enrolled in MinnesotaCare, a subsidized health insurance plan. The remainder are those whose GAMC eligibility is running out or who already are applying for MinnesotaCare.

"This one-time action provides the greatest benefit to enrollees and maintains their health care coverage," said Minnesota Human Services Commissioner Cal Ludeman.

County officials objected Monday that the proposal merely shifts health care costs to local taxpayers, and a top Democrat in the state Senate said it will deepen MinnesotaCare's financial problems.

The decision throws a lifeline, if a limited one, to some of Minnesota's poorest and most vulnerable residents.

Counties will pay MinnesotaCare premiums for the transferred enrollees for the rest of their eligibility period, up to a maximum of six months. At that point, enrollees must reapply and pay premiums, expected to average $5 a month. General Assistance recipients currently pay no premiums.

Gov. Tim Pawlenty had cut funding for General Assistance in the next biennium to help balance the state's historic budget deficit. It sparked an outcry from hospitals, alarmed they will be saddled with millions more in unpaid bills from patients who lose coverage.

Regions Hospital in St. Paul has started publishing a weekly census of General Assistance patients. Last week the hospital treated 231 GAMC patients at a cost of $275,113.

County and hospital officials called the state's gesture a step in the right direction, but only a temporary fix and not a very effective one. Many GAMC recipients incur high hospital bills but MinnesotaCare imposes a cap on in-patient hospital stays of $10,000 a year.

Also, GAMC is retroactive, which means uninsured patients who land in the emergency room can apply for coverage after they are treated, but MinnesotaCare is not.

"We do appreciate that the administration understands that turning a whole bunch of people out would be a bad thing," said Mike Harristhal, vice president of public policy at Hennepin County Medical Center. "But there are still substantial challenges before us."

Nor are the counties thrilled about picking up the premium tab. "It's in counties' interest to make sure this group of people has coverage, but we're not happy about having an additional cost passed on to us,'' said Patricia Coldwell, a policy analyst for the Association of Minnesota Counties.

Sen. Linda Berglin, DFL-Minneapolis, who chairs the Health and Human Services Budget Committee, said MinnesotaCare is already stretched because the economy has resulted in a surge of new enrollees. Add the General Assistance enrollees and the program is likely to run out of funding in 2011 instead of 2012, she said.

Ludeman acknowledged the added strain on MinnesotaCare, but said there was still enough time to find a more permanent fix in the next legislative session.

Whatever transpires, it will have a big effect on people such as Herman Mills, who lives in St. Paul.

A war veteran, Mills takes medication for post-traumatic stress disorder and depression. He lost his job driving trucks last year when the company closed. He also has arthritis in his spine -- from years of driving, he thinks. He has been on General Assistance for a year, and it has paid for several emergency room visits, medication and hernia surgery.

What will happen when the coverage runs out? Mills, 48, is optimistic: "I hope to be back on the road again."

Chen May Yee 612-673-7434