Some 145,000 poor children were dropped from a U.S. federal-state health insurance plan in the second half of 2003, with more than half the cuts made by Texas, a health-care research foundation said on Friday.

“The drop in (the) State Children’s Health Insurance Program is a major setback when millions of uninsured children are eligible but not yet enrolled,” said Diane Rowland, executive director of the Kaiser Commission on Medicaid and the Uninsured.

Net enrollment in the program, which mainly benefits working families, fell last year for the first time since it was launched in 1998, the Washington, D.C.-based Kaiser Commission said in a report.

In many cases, states made the cuts because a weak economy left them with huge budget deficits.

Along with Texas, two other states - Maryland and New York - accounted for most of the cuts in the program last year. The two eastern states each cut 23,000 low-income children, the report said.

A total of 11 states sliced enrollment, with “noteworthy” cuts made in Florida, Colorado and South Carolina, the report said.

The number of needy children who got this health insurance peaked in June 2003 at 3.964 million. Though 37 states added children to the program in the second half of last year, the total number still fell by 37,000 children, the report added.

In some cases, the number of children fell because they were shifted to Medicaid, which provides health care for more impoverished children and adults, the report noted.

Still, that was not the case in some of the states that clipped enrollment, including Texas. That state stopped covering “a broad range of services,” including glasses, eye and teeth exams, and services by chiropractors, hospices and skilled nursing centers, the report said.

The health insurance for children remains popular, the report said, noting it was protected from early rounds of cost cuts by its “relatively low cost per enrollee.”

The program cost the federal government $3.7 billion and the states $1.6 billion in fiscal 2002, the most recent data available, according to Kaiser Commission spokesman Rakesh Singh.

“Typically, kids are fairly cheap to provide health insurance for,” he said.