Gov. Bill Richardson's proposal for universal health care will provide more than enough revenue to cover the state's projected cost increase for extending insurance coverage to all New Mexicans, lawmakers have been told.

Human Services Secretary Pam Hyde outlined preliminary cost figures to a legislative committee and urged lawmakers to adopt the governor's proposal during the upcoming 30-day legislative session.

"We think it's doable," Hyde told the Legislative Finance Committee on Tuesday.

The governor's proposal would phase in a requirement that New Mexicans have health care coverage either through private insurance, enrollment in a taxpayer-subsidized program or by showing they have the financial resources to cover their health care expenses.

About 400,000 New Mexicans — 20 percent of the state's population — are uninsured and 40 percent of New Mexico employers do not provide health insurance to their workers.

When Richardson unveiled his proposal in late October, there was no cost estimate for it.

At a committee meeting Tuesday, Hyde outlined a preliminary cost analysis prepared by the firm, Mathematica Policy Research Group Inc. Lawmakers will be given a detailed briefing later this month.

The research group projected spending on health care over a five-year period if there were no changes in the current system — a mix of private insurance and programs by the state and federal government — and then estimated expenditures if the governor's plan was fully implemented starting in the 2010 budget year, which begins in July 2009 and runs through June 2010.

With no changes in the current system, about $6.9 billion would be spent on health care in 2010 and that would increase to about $9.2 billion in the 2014 budget year.

The governor's proposal would require state government to increase spending by about $75 million in the 2010 fiscal year. That's on top of nearly $880 million that would be spent by state government without any health care changes. The state would spend an additional $333 million over five years under the governor's proposal.

The state share is only part of the total cost picture, however.

Federal spending would increase by about $173 million in the first year and $760 million over five years under the governor's proposal. The governor's plan assumes that the federal government will help finance part of the costs through its share of Medicaid, which will the state's main taxpayer-financed program for helping lower and middle-income uninsured New Mexicans.

Private spending on health care under the governor's proposal would increase by almost $578 million in 2010 and almost $2.8 million over five years.

The governor proposes to require private individuals to have health insurance coverage. Employers must contribute to a state-run fund to help pay for covering the uninsured although that cost would be offset by amounts the employer paid for offering health benefits to their workers. The payments into the fund by employers are estimated at $500 a year for each employee.

Hyde sought to assure skeptical lawmakers that the governor's proposal would generate enough money to cover the projected spending increases required of state government.

From $187 million to $200 million could be raised each year, Hyde said, from the fees paid by employers and from increased collections of an existing tax on insurance premiums. The administration is not proposing to increase the tax rate. The current tax will provide more money because there will be more insurance policies issued under the governor's proposal, Hyde said.

"The governor's proposal will actually produce more money than you need," Hyde told lawmakers.

Hyde also suggested that the governor's proposal would prove less expensive over the long term than chipping away incrementally at the uninsured problem. The state would need to increase spending on Medicaid by nearly $590 million over five years just to cover the 258,000 children and adults who currently are not enrolled in the program but are eligible, she said.

Legislators voiced doubts whether the Legislature could thoroughly consider and then act on the complex health coverage issue during the upcoming session. Historically, 30-day sessions are devoted to writing a state budget and a limited number of nonfinancial issues.

"You've got a real educational job ahead of you," said Sen. John Arthur Smith, a Deming Democrat and chairman of the committee.

Smith and other lawmakers questioned the potential cost increases needed to implement the governor's plan.

In an interview after the meeting, Smith said the federal government may not continue to provide as much money for Medicaid in the future as it has in recent years. It's possible that state government could be confronted with federal cutbacks in a number of areas, such as transportation, at the same time spending increases would be needed for health care if the governor's proposal was implemented, Smith said.