Ask just about anyone what worries them most about the state budget and they'll point to the more than $3 billion in state tax dollars going to medical assistance for low-income residents.

"The cost of health care is going up roughly at 10 percent ... and continues to chew up a larger and larger piece of the budget. There's not a revenue stream out there that can keep up with that type of cost increase," said Victor Moore, Gov. Christine Gregoire's budget director.

The state projects it needs an additional $695 million over the next two years just to maintain current state health-care services to roughly 1 million low-income residents. The increase is driven by a loss of federal money, higher costs for everything from drug prescriptions to wheelchairs, and more people on the rolls who are using more health services.

There's little doubt that millions more will be needed when the Legislature comes back in two years.

More than two-thirds of the medical-assistance budget goes to the federally mandated Medicaid program. The rest goes to optional assistance provided by the state such as the Basic Health Plan, which provides health care to low-income adults who don't qualify for Medicaid.

In the 2003-2005 budget, about $7.5 billion was spent on medical assistance, of which $3.4 billion came from state tax dollars.

There's widespread consensus among both Democrats and Republicans that something needs to be done, but no agreement on what. Proposals to cut services meet swift opposition by labor, health-care and other advocacy groups.

For now, lawmakers aren't planning dramatic cuts. In fact, Democrats have called for a program that would provide health care to every child in the state by 2010.