New York State Governor Eliot Spitzer offered harsh criticism of new federal rules governing the State Children’s Health Insurance Program, saying they will block his state’s efforts to cover more children.

Spitzer says New York may fight the new rules in court if necessary.

Appearing with U.S. House Ways and Means Committee Chairman Charles Rangel, D-N.Y., Spitzer said the 2 had met recently with the state’s Health Commissioner to discuss new rules for the SCHIP program, announced by the Centers for Medicare and Medicaid Services, that would limit the ability of states to expand the SCHIP program’s coverage.

“We are calling on President Bush to abolish these troublesome roadblocks to insuring our nation’s children,” Spitzer said. “The President should invest in the health of America’s children and allow states like New York, and nearly 20 others, to implement programs that will help ensure that more and more children receive the healthy beginning they deserve.”

The new CMS rules would block not only New York’s planned expansion of the program, but also block the plans or roll back prior expansions in 17 other states as well as the District of Columbia, according to Spitzer.

New Jersey Governor John Corzine has also criticized the new regulations.

Rep. Rangel has said that legislation currently being debated in Congress to reauthorize the program would likely override the CMS rules, but the Administration has been critical of expansions that it sees as moving towards socialized medicine and would be more likely to veto a bill allowing such expansions.

“Flexibility has been the cornerstone of SCHIP’s past success, allowing states to design their programs based on local needs, values, and economics,” Rep. Rangel said. “So if we allow local adjustments in federal subsidies like housing or Medicare, why wouldn’t we do so in safeguarding the health of our youngest generation?”

Under the new rules being set by CMS, states seeking to expand SCHIP coverage would have to show that they have already enrolled 95% of children living in households at less than 200% of the federal poverty level.

New York submitted its proposal to expand the coverage limits for its SCHIP program to CMS in April. Under the proposal, coverage limits would be raised from the current level of 250% of the federal poverty level, or around $43,000 in annual income for a family of 3, to 400%, or roughly $68,000 in annual income for the same family.

If CMS does not approve the proposed expansion, Spitzer said the state may take the issue to court, arguing that the new rules contradict provisions in the current SCHIP law and that the rules were imposed without notice or a required comment period.