Feds take aim at children's insurance lawsuit

Tallahassee - The Biden administration on Tuesday urged a judge to dismiss a lawsuit in which Florida has challenged federal guidelines for a program that provides subsidized health insurance to tens of thousands of children.

By Jim Saunders

The filing in federal court in Tampa by U.S. Department of Justice attorneys was the latest move in a months-long battle over guidelines issued last year for 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, that has meant families have paid $15 or $20 a month for coverage.

Florida filed the lawsuit in February, challenging guidelines issued by the federal Centers for Medicare & Medicaid Services that would prevent 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 guidelines could lead to coverage being provided for months without premiums being paid.

With KidCare financed by the state, the federal government and premiums, the lawsuit said family payments play an important role in "maintaining the long-term stability" of the program.

"Requiring participants to make modest contributions to the cost of health insurance also reflects a conscious policy choice by the Florida Legislature, which concluded that Florida residents are best-served when those receiving state-subsidized health care retain a measure (of) accountability for, and investment in, the benefits they receive," the lawsuit said.

But the Biden administration argues that the guidelines properly carry out a federal law known as the "Consolidated Appropriations Act, 2023" that made changes to the Children's Health Insurance Program. In a February court filing, Justice Department attorneys said the law required the children's program to match a "continuous eligibility requirement" in Medicaid that does not allow dropping coverage for non-payment of premiums.

"These changes were intended to reduce 'churn'—cycles of termination and re-enrollment that increase administrative costs and cause coverage lapses for vulnerable children," said the February document, which was a response to a Florida request for a preliminary injunction.

The Biden administration's motion to dismiss the case filed Tuesday and the February document also raised a series of other arguments, including that such disputes should go through an administrative process.

Florida's children's health program dates to the 1990s, with subsidized insurance available to families with incomes up to 210 percent of the federal poverty level. As an example, a family of four at 200 percent of the poverty level this year would have income of $62,400, according to federal calculations.

The Legislature and Gov. Ron DeSantis last year approved a bill that would expand eligibility in the subsidized health program to 300 percent of the poverty level with higher premiums than have been charged in the past. The expansion requires federal approval, and court documents said the state would have to comply with the new guidelines to get approval.

"CMS (the federal Centers for Medicare & Medicaid Services) indicated that it would not approve Florida's proposed expansion without accompanying modifications to Florida CHIP's (Children's Health Insurance Program's) continuous eligibility provisions, namely, the provisions that allow the state to disenroll an eligible child for nonpayment of premiums during the continuous eligibility period," the lawsuit said.

Florida contends that federal officials have misinterpreted the law that made changes in the children's health program. Also, it argues that federal officials have violated a law known as the Administrative Procedure Act in the guidelines.

U.S. District Judge William Jung held a hearing April 18 on Florida's request for a preliminary injunction but had not issued a ruling as of Wednesday morning, according to a court docket.