Janice Vasquez was happy when her husband's higher commissions for delivering linens meant bigger paychecks over the summer months.

But the joy was short-lived. As of Wednesday, the family's marginally higher income means that Vasquez's 2-year-old daughter, Viviana, lost her government-funded health insurance coverage. For Vasquez, whose child is susceptible to respiratory infections, the high cost of health care on the family's weekly income of $540 to $550 is now a daunting concern.

"I can't qualify for Medicaid. I don't qualify for CHIP (Children's Health Insurance Program). My husband doesn't have health insurance. I don't have a job to where they can provide me with insurance," she said. "So I don't know what I'm going to do if she gets sick."

During the past year, 147,525 children have been dropped from CHIP — a government-funded insurance program for the children of the working poor — because of stricter eligibility rules. State leaders say the move has been necessary because the state is short of money. But others disagree, calling it a matter of priorities.

Dr. Jeffrey Starke, chief of pediatrics at Ben Taub Hospital in Houston, said he often runs into colleagues across the country who find it unfathomable that the state, which a year ago had 507,259 children on CHIP, has purposely reduced that number to 359,734.

"They look at me like we are barbarians," Starke said. "To intentionally knock covered children off health insurance is such an incredibly foreign concept to most people, they can't understand it. They think we are nuts."

The highly charged issue has become a political hot potato in Texas, even fueling an acrimonious debate between Gov. Rick Perry and Comptroller Carole Keeton Strayhorn, who is likely to make a run for Perry's seat in 2006. Both are Republicans.

Eligibility debate
Just last week, Strayhorn asked Perry to rescind a "mean-spirited" test that disqualifies families from CHIP if they have too much money in their savings account or their second car is valued at more than $4,650.

"Governor, we are talking about disqualifying working poor families who have managed to put aside in their personal savings accounts as little as $5,000 for their children's education, or for unexpected emergencies, or any of the normal costs of living," she said in a harshly worded letter that also accused Perry of manipulating budget figures.

Perry's office responded with a statement saying that Strayhorn herself had advocated changing the re-enrollment period from every 12 months to every six months.

"Carole Strayhorn flip-flops so much on her own record she makes John Kerry dizzy," the terse statement said in reference to the Democratic candidate for president.

State Rep. Arlene Wohlgemuth, who authored the bill that called for many of the CHIP cutbacks, said the focus of the legislation was to get limited resources to those people who need them most. And in Texas, the number of children qualifying for Medicaid, which covers the poorest of the poor, has been on the rise.

During the past four years, she said, the number of children receiving either Medicaid or CHIP roughly doubled — from 1.1 million in 2000 to 2.2 million in 2004.

"While particular programs may have gone down," she said, "I don't want us to lose sight of what is important here, and that is that we are meeting the needs of Texas."

No vision, dental benefits
In a state that continues to have the lowest percentage of insured children in the nation, however, not everyone agrees.

Barbara Best, who chairs the Gulf Coast CHIP Coalition, said her organization has surveyed dozens of families who have lost their government-funded health insurance because of the new rules imposed during the past year.

For example, one of those rules uses gross income instead of net income to determine a family's eligibility. Also, even those who qualify no longer get vision and dental benefits.

"The families that lost coverage, the children are going untreated," she said. "They have not been to the dentist, they have not been to the eye doctor in the last year, and if they have, they have suffered great financial hardships."

Brenda Laviolette lost her insurance coverage for her 15-year-old son when she got a raise last year that boosted her salary from $876 to $998 every two weeks.

An administrative assistant at the Mental Health-Mental Retardation Authority of Harris County, Laviolette said she would add her son to her private health insurance coverage but it would cost her $600 a month.

"It's just expensive," she said, adding that her son hasn't seen a doctor or a dentist in more than a year. "You are up a creek without a paddle."