Eight states support suit vs U.S. over kids' health

[CatWoman]

NEW YORK (Reuters) - Eight states will back a lawsuit to stop the federal government from imposing new rules which they fear will force them to cut children from a health insurance plan, five governors said in a statement on Monday.

The State Children's Health Insurance Program, which relies heavily on federal funding, initially focused on poor children but governors increasingly have sought to add children from more moderate income families who say they cannot afford to buy private insurance.

"Hard-working families are caught in a no-win situation -- they earn too much to qualify for Medicaid, their employers do not offer coverage, and they cannot afford private coverage," said New Hampshire Democratic Governor John Lynch.

Under the new rules, children who have no health benefits would have to wait a year before joining the state plans. States would have to cover 95 percent of poverty-level families before enrolling more middle-income children, a requirement they say they cannot meet.

The states of Washington, New York, Maryland and Illinois will file the suit in the United States District Court for the Southern District of New York, said a spokesman for Washington Democratic Governor Christine Gregoire.

Arizona, New Jersey, New Hampshire and California will likely file amicus briefs, the spokesman added.

New York Governor Eliot Spitzer, a former state attorney general, said: "The states are seeking a court ruling declaring those rules unlawful and prohibiting the federal government from applying the rules when reviewing individual plans."

The Democrat added that the Bush administration put out the rules without the required public comment period.

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