States now spend more on health care for the poor than they do on elementary and secondary education, a policy group said Thursday in its annual review of efforts to deal with the growing problem of the uninsured.

The states spent 21.9 percent of their revenue on Medicaid in fiscal year 2004. Elementary and second education consumed about 21.5 percent of states' budgets. Higher education came in at a distant third, 10.5 percent.

"Today, Medicaid accounts for the largest and fastest growing category of state expenditures," said the State Coverage Initiatives program, which provides technical support to help states broaden health insurance coverage.

The program's 2006 report shows that many states are working toward expanding health insurance coverage, but they go about it in many ways.

In Illinois, the state will make insurance coverage available to all uninsured children. Premiums will be charged on a sliding scale based on income.

Maryland passed legislation that would require private-sector firms employing more than 10,000 people to spend at least 8 percent of payroll on health care. The legislation targeted Wal-Mart.

Montana passed a bill that encourages small businesses to join together to obtain health insurance. The state provides tax incentives to businesses that offer insurance through the program.

The report also noted reductions in health insurance coverage, such as in Tennessee, where an estimated 320,000 people were removed from the state's Medicaid rolls.

The increase in Medicaid costs for the states stems from the continued decline in employer-sponsored health insurance, the report said. Medicaid generally covers children who lost access to employer-sponsored coverage, but those programs often don't cover adults who have lost such coverage.