The federal government has approved Hawai'i's request to expand its medical insurance program for the poor, making it possible for 29,000 more people to qualify for healthcare.

The Lingle administration plans to use $100 million in federal money to help cover the expansion over the next six years, which would bring 20,000 low-income adults and 9,000 children into the Quest program. The agreement also allows the state to continue to make direct payments to hospitals to offset the costs of caring for the uninsured.

"The renewal and expansion of state health insurance takes us a step closer to our goal of ensuring everyone in Hawai'i has healthcare coverage," Gov. Linda Lingle said in a statement. "The approval will also increase our support for the hospitals that are serving people without insurance or health-care coverage."

A state task force studying healthcare has estimated that as much as 9 percent of the state's population — or about 120,000 people — may be uninsured, although the number is difficult to pinpoint. The Neighbor Islands generally have a higher rate of people uninsured than on O'ahu.

The Prepaid Health Care Act of 1974, which requires companies to give health insurance to employees who work 20 hours a week, has made Hawai'i a leader among states in healthcare coverage. But the Lingle administration and state lawmakers have been trying to expand coverage to capture more of the uninsured.

Quest offers managed care for low-income adults and children and a Medicaid fee-for-service program for the elderly and disabled that accounts for a combined $1 billion in state and federal money each year.

Lillian Koller, the director of the state Department of Human Services, said the agreement is "an important milestone in Gov. Lingle's efforts to reform and enhance the reach of the state's Medicaid program, including Quest, to ensure that Hawai'i is able to meet the growing health-care needs of its population in a fiscally responsible manner."

The Quest expansion would be aimed at adults who earn $910 a month, according to the Lingle administration. Income eligibility limits will be raised by 50 percent so children from families who earn up to 250 percent of the federal poverty level — or $4,637 a month for a family of four — would qualify.

The state will also reduce monthly premiums for some middle-income families who pay to cover their children through Quest, from $60 a month down to $30 or $15, depending on income.

Democrats in the Legislature and the Hawai'i Medical Service Association are working on a separate plan to provide basic healthcare coverage for children who do not qualify for Quest and do not have private insurance.

Reach Derrick DePledge at ddepledge@honoluluadvertiser.com.