The Bush administration is attempting to rein in spending for SCHIP--the State's Children Health Insurance Program. SCHIP provides insurance for those children who do not qualify for Medicare but who are nevertheless unable to afford private insurance.
As the article linked above notes, children in 18 states could be affected and 29,000 children in New Jersey alone could lose insurance thanks to the federal guidelines the Bush administration is pushing.
More about this health insurance program comes from Kevin Freking of the Associated Press. The AP article cites angry objections from state health officials. Of particular concern is the year-long wait mandated in the new guidelines: children would have to be uninsured for a year before qualifying for SCHIP.