The state administration has found itself unable to meet its fiscal obligations to Hawai'i's new Keiki Care program, which aims to provide a bare-bones level of medical coverage for children who otherwise would be uninsured.

Officials point to shrinking state tax coffers and to recently diminished federal matching funds for Med-Quest, the state's Medicaid coverage program for low-income families.

This means the state will have fewer dollars to cover what are sure to be mounting expenses of Keiki Care, as the economic downturn hits Hawai'i residents hard and propels more to search for government healthcare aid.

But the money shortage does not lift the state's duty to the nearly 2,000 children enrolled in Keiki Care, which was meant to provide essential coverage for children whose families don't qualify for Quest but can't afford the monthly premiums of the more typical private plans.

Those who would be dropped from Keiki Care will still need insurance. The state has an obligation to identify which ones Quest can help, and see that all are protected — with subsidy, if possible.

The Hawaii Medical Services Association was running Keiki Care under contract, a public-private partnership in which the $55 monthly premium was approximately split between HMSA and the state.

The state believes that roughly 20 percent of these could qualify for Quest, but not enough has been done to find the qualifying children.

A letter has been sent to families to encourage them to learn if they qualify and to apply, but few have responded.

That's because the urgency of the situation has not been conveyed to the families and requires more personal outreach than a form letter. A panel of lawmakers, Lingle administration officials, HMSA staff and healthcare advocates met yesterday to discuss how to resolve the issue; suggestions included contacting the families through their healthcare providers, which is one sensible approach.

The Department of Human Services now must find the families it can help through Quest. HMSA picked up the state's portion of Keiki Care subsidies through the end of the year, and the administration must assign sufficient staff to get it done by then.

Affected families also can dial 211 to have the Medicaid application (ask for the pink form) mailed to them.

For others who need help, legislators rightly are searching for new partners to offset costs that the state can no longer afford.

That's a critical task when the economy will leave more families at risk. The children need everyone's kokua.