Many health plans that remain in the program have cut benefits, including coverage of prescription drugs, or increased the premiums and co-payments charged to beneficiaries this year.

Several H.M.O.'s remaining in Medicare said they would cut benefits or increase premiums and co-payments charged to Medicare beneficiaries next year.

To balance the fund's budget, she may have to cut benefits or increase co-payments for drugs and dental visits.

Under the governor's plan, Medicaid, the federal-state program health insurance program for the poor, would cut some dental and long-term benefits and increase co-payments for prescription drugs.

More than in years past, Mr. Cesarano said, they are scaling back coverage, increasing workers' contributions and increasing co-payments and deductibles.

The group also wants to increase co-payments for medical visits to $25, from $10.

It estimated that states would establish co-payments for 11 million Medicaid recipients, half of them children, and increase existing co-payments for an additional 6 million people.

At the same time, she said, it will be difficult to increase monthly premiums or co-payments because employees are "very sensitive" to such costs.

Two-thirds of the states say they are cutting Medicaid benefits, increasing co-payments, restricting eligibility or removing poor people from the rolls because of soaring costs and plunging revenues.

Mr. Shaw said the two sides had also moved closer on health coverage; union officials said they feared the workers would be required to increase their premiums and co-payments.