Democrats in the Minnesota House are proposing to cut state payments to hospitals and doctors to help balance the budget.
Rep. Tom Huntley, DFL-Duluth, said most provider payments would be cut by 3 percent, but he said no one currently on state subsidized health insurance would lose their coverage.
Huntley said his health and human services bill would also work to expand coverage for children by making it available through free and reduced lunch programs at school.
"Half of the kids that don't have insurance in this state are already eligible for either Medical Assistance or MinnesotaCare so we need ways to simplify the registration process or the reregistration because we have a huge churning in both of those programs so we're trying to prevent that," he said.
Huntley said expanding health insurance for children would generate more federal money for Minnesota.
The plan will need to be reconciled with a yet-to-be-released Senate bill.
Gov. Pawlenty initially proposed cutting thousands of people from subsidized health insurance, but later delayed those cuts until 2011 to maximize federal stimulus money.