INDIANAPOLIS (AP) — The state would provide incentives for small businesses to provide health coverage and increase preventive screenings at schools under a proposal Democratic gubernatorial candidate Jim Schellinger announced Tuesday.

Schellinger said he also would push for federal expansion of a program that helps states provide health insurance to children from lower-income families, and look for ways to get more eligible children enrolled in the program in Indiana.

"As I have visited all across this state ... I have consistently heard from countless Hoosier families who have struggled to gain access to affordable health care," said Schellinger, president of an Indianapolis architecture firm, who faces former U.S. Rep. Jill Long Thompson in the May 6 primary.

Long Thompson campaign manager Travis Lowe said Schellinger's plan would create more government bureaucracy, puts more mandates on schools and businesses and it "generally throws more money at the system in the hopes of fixing it."

Schellinger said he was proud of the bipartisan legislation approved by the Legislature last year that created a new program to make health care insurance available to more lower-income Hoosiers, but said more needs to be done.

The legislation stemmed from a proposal that Republican Gov. Mitch Daniels pitched in 2007 that included an increase in the state cigarette tax to help pay for the program. Daniels does not face a primary opponent.

As of Friday, the state's Family and Social Services Administration had received 36,707 applications for the program, but only 4,304 people have been deemed fully eligible so far. The goal is to get as many as 50,000 people enrolled this year, but the plan is designed to cover as many as 130,000.

Schellinger cited 2006 U.S. Census Bureau figures in saying that 748,000 Hoosiers have no health insurance, and that 123,000 children — or one in 10 Indiana kids — were not covered.

His plan would phase in subsidies to help small businesses provide health insurance to their employees if they have been unable to do so for the previous two years. He said as with health care pools, the state would look to partner with private insurers to offer a range of plans for small businesses.

The first phase would target the self-employed and businesses that have 10 or fewer workers, with the second phase increasing accessibility to subsidized insurance pools to firms with 10 to 25 employees. Schellinger said he would set aside $5 million for the plan the first year, and at least $10 million in subsequent years.

The proposal would increase preventive health screenings in elementary schools to cover chronic health conditions such as diabetes and asthma. Schellinger said schools are now required by law only to conduct visual screening tests.

He also said he would push for legislation that Congress passed to expand eligibility in the State Children's Health Insurance Program by spending another $35 billion on it over the next five years. President Bush vetoed the legislation, and Congress has failed twice to override the veto.

The revenue needed for the enrollment increase would come from a 61-cent increase in the federal excise tax on a pack of cigarettes, as well as comparable tax increases on other tobacco products.

Schellinger noted that Daniels has opposed the SCHIP bill that Bush vetoed. The Daniels administration has said the higher federal cigarette taxes would cost Indiana smokers $300 million per year but the state would only get $50 million back in SCHIP funds.

In Indiana, SCHIP helps pay for Hoosier Healthwise, which as of last fall enrolled about 75,000 Indiana children from families earning up to twice the federal poverty level, a floating scale that is now $42,400 for a family of four. The bill vetoed by Bush would raise eligibility nationwide to four times the poverty level.

The state has applied to the Bush administration to raise eligibility in Indiana's program to 250 percent of the federal poverty level, which would be $53,000 for a family of four. FSSA spokeswoman Lauren Auld said the state was in negotiations with federal officials about the request.