Worried that new federal regulations imperil the health insurance coverage of several thousand New Hampshire children, state officials are joining a multi-state lawsuit against the Bush administration.

Deeming the change in federal rules "sudden and arbitrary," Gov. John Lynch criticized the Bush administration for "jeopardizing health care for the children of working families." The President Bush-backed changes tighten eligibility requirements for the government's children's health insurance program, potentially leaving some children without coverage.

New York is filing the legal challenge, and New Hampshire has joined five other states in supporting the lawsuit: Arizona, California, Illinois, Maryland and Washington. New Jersey has filed a separate lawsuit over the issue. Lynch has made children's health insurance a priority of his gubernatorial tenure and had set a goal of extending coverage to 10,000 more children in the next three years.

The lawsuits come as Bush is threatening to veto legislation that would increase federal money for the program, setting the stage for a congressional showdown. Last week, the U.S. House and the Senate voted to devote $60 billion to the program over the next five years, an increase of $35 billion over current spending. In the Senate, 18 Republicans voted for the measure, including New Hampshire Sen. John Sununu. New Hampshire's other senator, Judd Gregg, opposed the bill.

While Bush is fighting the Congress-backed legislation, his administration has simultaneously toughened eligibility requirements for the program, which is called the State Children's Health Insurance Program. In August, New Hampshire received word of the changes, which state officials say will compromise coverage for 2,000 children.

The program was designed to extend health insurance to children whose parents earn too much to qualify for Medicaid but too little to afford private insurance. Currently, about 7,400 children are enrolled in the New Hampshire version of the program, called Healthy Kids. About 64,000 New Hampshire children, meanwhile, are enrolled in Medicaid, which is available to children whose parents earn up to 185 percent of the federal poverty level, said Healthy Kids President Tricia Brooks. The poverty level for a family of four is $20,650.

State law allows families earning up to three times the federal poverty limit, or about $62,000 for a family of four, to enroll their children in Healthy Kids. Families at higher income levels pay higher monthly premiums to the state. But the Bush-backed changes would make it difficult for the state to cover children whose families earn more than 250 percent of the poverty limit, or nearly $52,000 for a family of four.

In a letter to state officials, federal regulators said the tough requirements were designed to prevent families that can afford private insurance from opting for the government coverage and to ensure that the program is targeting low-income families.

But state officials argue that the cost of living is relatively high in New Hampshire. Healthy Kids, they say, provides an essential service for families that make too much money to meet Medicaid eligibility requirements but can't afford insurance.

"What's disappointing here is that the president doesn't make any adjustment for understanding the cost of living," Brooks said. "What might work in Texas, his home state, isn't sufficient for New Hampshire."

"There was no due process in the issuing of these" regulations, added Brooks, who described the new rules as "a number of hoops that (the Centers for Medicare and Medicaid Services) set up for states to jump through." Brooks said that she hasn't seen evidence of families able to afford private insurance opting for government coverage.

The rules require children to wait one year after losing private insurance before they can enroll in the state plan. Currently, kids have to wait six months, unless there is a clear reason why they lost coverage. (next page »)