NEW YORK - A state lawmaker proposed Wednesday that New York create a $59 billion health insurance program that would cover everyone in the state, and probably be paid for through a huge tax increase.

The plan, by Assembly Health Committee chairman Richard Gottfried, would generally replace the private health plans that now provide coverage to residents through their jobs.

Gottfried said he is convinced the state could do the job cheaper and more efficiently than private insurers, while simultaneously offering more generous benefits.

“We can have better coverage for all of us,” said Gottfried, a Manhattan Democrat.

He offered no suggestions, however, on how to pay for the plan, which would give New York the country's largest state-run health program.

Gottfried acknowledged that the program would have to be paid for by new taxes, but he said he believed residents would wind up paying less under his plan than they pay now in insurance premiums and deductibles. His office estimated that the current system costs New Yorkers and their employers $63 billion per year.

The proposal was applauded by some groups that have lobbied for universal health care, but criticized by others who suggested there was little evidence the state could afford it, or that it could do a better job than the current insurance system.

“I'm trying to figure out how somebody can say with a straight face they're going to double taxes to save money,” said E.J. McMahon, director of the Empire Center for New York State Policy, part of the conservative Manhattan Institute.

Gov. Eliot Spitzer, who announced earlier this week that he would commission an independent research group to help develop a plan for universal health coverage, said he welcomed Gottfried's proposal as a “valuable option” worthy of future study.