Federal Judge tosses Gov. DeSantis lawsuit on children’s health insurance

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A federal Judge handed Florida a stinging defeat in court by tossing a lawsuit that challenged rules for children’s health insurance programs.

U.S. District Judge William Jung, who was appointed by former President Donald Trump, dismissed the case, saying the court lacks jurisdiction over the dispute. The lawsuit could eventually be refiled, but Jung said the state needed to challenge the rules at the federal agency level first.

Florida was protesting new federal guidelines that stated that families could not be removed from the Florida KidCare program for failing to pay premiums. While awaiting a ruling, the state removed 22,000 children from state administered health insurance programs, including 15,000 whom the federal government maintains should not have been dropped.

In a 16-page ruling, Jung said federal administrative court is the proper venue for the state’s dispute with the Centers for Medicare and Medicaid Services (CMS) over the new continuous eligibility requirements, contained in the 2023 federal budget, or the Consolidated Appropriations Act.

“The court decision is good news for children in Florida and across the country,” said Joan Alker, research professor and the executive director of the Georgetown University Center for Children and Families.

“The actions of the (Ron) DeSantis Administration over the last year have shown a callous disregard for children’s health coverage,” she added. “The state has disenrolled hundreds of thousands of children losing Medicaid coverage during the unwinding many of whom likely remain eligible and appears to be the only state that has kicked off thousands of children from (the children’s health insurance program) in contravention to the new federal law which went into effect January 1, 2024.”

The Agency for Health Care Administration did not immediately respond to requests for comments.

AHCA Secretary Jason Weida had previously defended the state’s legal actions and the decision to drop children from the program after Florida Politics first reported the news in April. AHCA insisted that the federal guidelines were an “unlawful mandate.”

AHCA subsequently sent the following statement after initial publication of the story Friday: “The Agency firmly disagrees with today’s decision and intends to appeal. It’s unfortunate the Court did not address the merits of our case.”

Florida KidCare is an optional Medicaid expansion created in 1998 for children aged 5-18 living in families earning too much to qualify for traditional Medicaid — which is free — but no more than 200% of the federal poverty level. Families pay monthly premiums and copayments toward the costs of the coverage. The remainder of the costs are subsidized by state and federal Medicaid dollars.

There are no copayments or premiums in the traditional Medicaid program.

Prior to Jan. 1, 2024, it was optional for states to provide children enrolled in Medicaid or CHIP with 12 months of continuous eligibility. 

The 2023 federal budget, which amended federal law, requires states to provide 12 months of continuous coverage to Medicaid and CHIP eligible children beginning Jan. 1, 2024. Biden’s administration announced it would enforce the mandate in an October 2023 FAQ document, and that children could not be terminated for failing to pay premiums.

AHCA filed what Jung referred to in his order as an “instant lawsuit” in federal court in February.

The dispute between the state and the federal government is the underlying reason the DeSantis administration has not increased access to the subsidized policies allowing families to earn up to 300% of the federal poverty level and maintain subsidized coverage. The expansion was championed by House Speaker Paul Renner. The expansion is expected to help an additional 42,000 children qualify for subsidized health insurance coverage.

In a legal filing, the state said it collects $30 million in KidCare premiums and that cost-sharing is vital to the sustainability and expansion of CHIP. Florida also maintains that CHIP cost sharing enables it to meet the balanced budget requirement of the Florida Constitution.

The ruling was also praised by Florida Policy Institute (FPI) and Florida Health Justice Project (FHJP).

“We applaud the judge’s decision to dismiss this case. The new law and interpretation by CMS regarding continuous eligibility will enable tens of thousands more children and youth to receive much needed health care without fear of early termination of coverage,” said Sadaf Knight, CEO of FPI.

Lynn Hearn, FHJP advocacy director, said: “The court’s decision today completely eliminates any excuse Florida believed it had beginning January 1, 2024 to disenroll children from CHIP/KidCare, when their parents miss a single premium payment. Florida must stop these disenrollments immediately, and direct its resources toward expanding and improving access to health care for Florida’s children rather than impeding it.”