WASHINGTON (AP) -- The Bush administration demonstrated Friday it will strictly adhere to new guidelines that limit the scope of a popular children's health insurance program. It rejected an application from New York to let more middle-income families participate.

The administration issued its guidelines just three weeks ago. Democrats and governors from both parties have said the rules are misguided and will result in more uninsured children.

The guidelines require that a state assure the federal government that it has already enrolled at least 95 percent of poor children in public health programs when expanding eligibility to higher-income children. Poor children in this instance are families with incomes below 200 percent of the poverty level -- $34,340 for a family of three.

New York sought to expand eligibility in SCHIP to 400 percent of the federal poverty level, or $68,680 for a family of three -- the highest level in the nation. Under the program, the federal government and the states subsidize the cost of health coverage.

New York did not show that it met the new 95 percent threshold.

"New York has not demonstrated that its program operates in an effective and efficient manner with respect to the core population of targeted low-income children," said Kerry Weems, acting administrator for the Centers for Medicare and Medicaid Services.

Rep. Charles Rangel, D-N.Y., said the state had made every effort to increase medical coverage for children, starting with the poorest, and called the Bush administration's decision "unconscionable."

"It is clear the administration is spoiling for a fight and it's unfortunate he has chosen children's health care," said Rangel, chairman of the House Ways and Means Committee.

Weems noted that the new guidelines require New York to make sure that middle-income children have been uninsured for at least a year before allowing them into SCHIP. Such a requirement is designed to keep families from dropping private health insurance so that they could get cheaper or better coverage through public programs.

New York's application called for a six-month waiting period. State officials have said they could not justify making children wait a year for coverage.

"I cannot find that New York meets the requirement for reasonable procedures to prevent substitution of coverage," Weems said.

Democratic lawmakers will attempt to overturn the new guidelines in coming months as Congress considers renewing the children's program for an additional five years. Under current spending levels, SCHIP would cost about $25 billion over the next five years.

The House passed legislation in early August that would raise spending on the program to about $75 billion over five years. The Senate passed a bill raising spending to about $60 billion. A conference committee will try to work out the differences in the two bills, but so far, such a committee has not been formed. The program expires on Sept. 30, unless Congress approves an extension.

The administration has proposed spending of about $30 billion, and the president has promised to veto the House or Senate versions if either reaches his desk.

Rep. Pete Stark, D-Calif., said Thursday that Democrats would craft legislation to overturn the administration's new guidelines.

"It's so universally unpopular, we'll find a way," Stark said.

But, most House Republicans appear to support the president's vision of how the SCHIP program should work. Some of them would have to side with Democrats if the president decided to veto legislation overturning the guidelines.

"Some states have expanded the program to adults who are hardly needy, much less poor, and now the Democratic majority sees a chance to use the SCHIP reauthorization to finally accomplish what the Clinton administration failed to do, put government bureaucrats in charge of everyone's health care," Rep. Joe Barton, R-Texas, said in a press release Thursday.

Democratic leaders on the House Energy and Commerce Committee also wrote the administration on Thursday with dozens of questions about the new guidelines. For example, they wanted to know the provision in federal statute where a child has to be uninsured for a full year before participating in SCHIP in states with expanded eligibility criteria.

"We are very concerned this directive would severely undermine the ability of states to make headway against the rising tide of uninsured and would result in tens of thousands of children losing their affordable insurance coverage," said the Democratic lawmakers.

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By Kevin Freking, Associated Press Writer

Copyright © 2007 The Associated Press. All rights reserved.

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