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ANNAPOLIS—The state is putting a halt to a portion of a health care expansion that won praise from advocates when it passed during the 2007 special legislative session but is too expensive to pay for in the current economic climate.

Gov. Martin O'Malley's $14.4 billion general fund budget leaves intact the expansion of Medicaid to eligible parents with incomes at 116 percent of the federal poverty guidelines — or about $20,000 for a family of three.

That effort to expand coverage to the uninsured, which began July 1, had enrolled 28,000 people as of Wednesday.

But there is no money for expanding coverage to childless adults, John Folkemer, deputy secretary of the Department of Health and Mental Hygiene, told House and Senate committees this week.

Under the 2007 Working Families and Small Business Health Coverage Act, the state was to begin enrolling childless adults in the plan starting July 1, 2009, but only if there was enough money to do so.

"You need money on the front end, and that's what we're lacking right now," House Health and Government Operations Chairman Peter A. Hammen said Wednesday.

Advocates are holding out hope that a federal stimulus bill can provide the money needed to keep the expansion — which was to include 30,000 parents and about 70,000 childless adults — on schedule.

Leaders in the U.S. House of Representatives are considering an $87 billion Medicaid stimulus package.

O'Malley (D) assumed $350 million in federal stimulus money in his budget plan. Most of that would go toward the $5.7 billion set aside for Medicaid and continuing the expansion of coverage to low-income parents.

Vincent DeMarco, president of the Maryland Citizens' Health Initiative, said he would "strongly urge" lawmakers to fund the expansion to childless adults should the state receive more than $350 million.

The U.S. House of Representatives is considering raising the federal match in Medicaid funding from 50 percent to 54.9 percent, which would mean about $300 million more a year in federal money to Maryland. There could be additional federal aid if unemployment rises more than 1.5 percentage points.

"So we're talking about fairly significant amounts, and if the unemployment rate goes up, it could be a pretty big bump on top of that," Folkemer said.

While the poor economy and state efforts to educate parents about their eligibility are driving more to enroll, the economy has hampered efforts to increase coverage elsewhere.

O'Malley's budget includes, for a second straight year, a $15 million subsidy for businesses with from two to nine employees to provide Medicaid coverage.

Between the start of the program in October and the end of last year, 106 employers had enrolled, providing coverage to 332 employees and a total of 554 people. The average premium subsidy per person is $1,129, for a total annual subsidy of more than $625,000.

The state expected to enroll 15,000 people each year under the program.

"This, of course, is not the rate that we had expected when this was first enacted," Rex W. Cowdry, executive director of the Maryland Health Care Commission, told the Senate Finance Committee on Wednesday. "The reason is very simple — it's the economy. It should be no surprise that small businesses are particularly vulnerable, and if they're facing a decision about deciding to start offering health insurance, they're going to be hesitant."

Legislators will be looking at ways to make the program more attractive to employers, but must make sure the state has the money to continue the subsidy, said Hammen (D-Dist. 46) of Baltimore.

"An employer doesn't want to provide a benefit to an employee, only to take it back a few years later," he said.