TALLAHASSEE, Fla. — Challenging what it called a “backdoor” attempt to expand entitlements, Florida has filed a lawsuit against the Biden administration in a long-running dispute about a program that provides subsidized health insurance to children.
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The lawsuit, filed Tuesday in U.S. district court in Tampa, challenges a rule that federal health officials finalized in November about the Children’s Health Insurance Program, which operates in Florida as KidCare. The program provides low-cost health insurance to children whose families make too much money to qualify for Medicaid. In Florida, families have paid $15 or $20 a month for coverage.
The dispute centers on part of the rule preventing states from cutting off coverage for non-payment of premiums after children have been found eligible for the program. Eligibility is determined each year, so the state contends the rule could lead to coverage being provided for months without premiums being paid.
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The lawsuit, which names as defendants the federal Centers for Medicare & Medicaid Services, the U.S. Department of Health and Human Services and their leaders, alleges the rule “amounts to a backdoor expansion of no-cost health insurance that was never authorized by Congress.” The program is jointly funded by the state, the federal government and premiums.
“The final rule threatens the integrity of Florida CHIP, including the tens of millions of dollars collected in premium payments annually,” the lawsuit said. “CMS (the Centers for Medicare & Medicaid Services) is imposing an expansion of entitlement benefits, requiring the provision of health insurance potentially at no cost for up to 11 months of the year. Florida has declined to expand many entitlement programs because doing so is not in the interest of the state and its residents, as it would put a tremendous strain on the provision of services, to the detriment of everyone.”
Florida also filed a lawsuit in February 2024 against federal officials on the issue. That lawsuit centered on guidelines that the Biden administration had issued about not cutting off coverage for non-payment of premiums.
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A federal judge in May ruled against the state, saying it needed to pursue an administrative challenge at the Centers for Medicare & Medicaid Services, rather than filing the lawsuit in district court. The state took the issue to the 11th U.S. Circuit Court of Appeals.
But the rule issued in November effectively trumped the earlier guidelines. As a result, lawyers for the state and the federal government filed a joint motion last month at the Atlanta-based appeals court to dismiss the first lawsuit.
Florida’s program offers subsidized insurance for children who are not eligible for Medicaid and whose household incomes are up to 210 percent of the federal poverty level. As an example, a family of four at 200 percent of the poverty level in 2024 would have had an income of $62,400, according to federal data.
Adding to the legal dispute, the Legislature and Gov. Ron DeSantis in 2023 approved a bill to expand eligibility in the program to 300 percent of the poverty level with higher premiums than have been charged in the past.
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Federal health officials last month signed off on the expansion but made the approval contingent on Florida complying with the rule about not dropping children for non-payment of premiums. In a Dec. 2 letter to the state, the Centers for Medicare & Medicaid Services said the requirement carried out a 2023 federal law — a position the state disputes.
The letter said that even without the 2023 law, the Centers for Medicare & Medicaid Services would have placed the condition of not dropping children on Florida’s planned expansion “in order to promote access to care and continuity of coverage.”
“It has been found that individuals with continuous health coverage are more likely to be in better health, less likely to forgo needed medical care, and more likely to develop patient-provider relationships,” the letter said.
The lawsuit seeks to block the federal government from enforcing the rule, which the state says violates a law known as the Administrative Procedure Act.
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