Bully for Gov. Corzine, who earlier this month became the first U.S. governor to defy President Bush’s attempts to unduly burden a health insurance subsidy for children who do not qualify for Medicaid. In a letter to the president, Corzine noted that the state’s FamilyCare program has provided medical coverage to 122,000 children. Under the administration’s new rules for the State Children’s Health Insurance Program (S-CHIP), 28,000 of those children would have been disqualified. Corzine has threatened to sue over the new guidelines.

Supporters of the president’s new regulations defend them as an attempt to rein in overly generous state programs that encourage families to drop private coverage in favor of government insurance. In fact, these supporters are defending ideology over the health of their fellow citizens. S-CHIP has been wildly successful in extending health coverage to some 7.4 million otherwise uninsured individuals. State budgets would collapse without it. Congressional Democrats offered a plan that would increase S-CHIP’s funding by $10 billion a year and thus extend coverage to an additional five million uninsured children.

In opposing these efforts, the administration seems less afraid of rule-breaking than in public competition to private insurance. The popularity of S-CHIP, like that of Medicare, makes it suspect to insurance and pharmaceutical interests who fear losing market share. And because it exposes a flawed system, it is a threat to those whose political strategy is based on tarnishing supporters of health care reform as socialists and worse.

Opponents of health-care reform need to maintain the illusion that Americans are satisfied with our jerry-rigged system of private insurance and inequitable access. Ultimately, what worries S-CHIP’s opponents is the idea that high-quality public health insurance may just catch on.