Twenty-eight private and public hospitals in Hawai'i will receive a total of $120 million in federal money over the next eight years to offset the cost of treating uninsured patients, state Human Services Director Lillian Koller said yesterday.

The state received notification on Friday that the federal government had approved the funding for Hawai'i, Koller said.

The money, about $15 million a year, will be divided among hospitals statewide when they incur losses caused by uninsured patients. Meanwhile, the state will expand the number of people eligible for its QUEST-ACE health insurance program, she said.

"The continued federal funding will help hospitals deal with their losses from uninsured patients, while we continue to work to get more people covered by insurance," Koller said.

The funding from the federal Centers for Medicare and Medicaid Services is a long-term extension of a program the state began participating in three years ago. The state receives about $15 million a year from the program; the money is distributed to 16 private and 12 public hospitals.

Hospitals estimate that the total costs to cover uninsured patients is more than $100 million a year.

Before 2005, Hawai'i hospitals had not received any federal funding for charity healthcare since 1994, Koller said.

Receiving a long-term commitment from the federal government for the funds was critical to state plans to continue offering help to the hospitals, she said.

"This much-needed infusion of money will help our hospitals remain financially viable, which is of critical importance to all our residents and visitors," she said.

To increase the number of people covered by the free QUEST-ACE program, the state is doubling the income eligibility. Under the new guidelines, a single adult can now earn up to $23,520 per year and still be eligible for the the program.