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The contentious fight between Florida and the federal government over children’s health insurance continues to ratchet up even though President-elect Donald Trump is just days away from entering office.
Florida health care officials were recently put on notice that the state is at risk of losing federal Medicaid funds because of DeSantis’ administration’s refusal to abide by federal law and rules regarding continuous eligibility for children enrolled in the state children’s health insurance program (CHIP), called KidCare in Florida.
Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure sent a letter to Florida Deputy Secretary for Medicaid Bryan Meyer Jan. 2 directing the state to submit a corrective action plan (CAP) and a CHIP state plan amendment (SPA) showing how the state plans to implement the continuous eligibility requirement and, moreover, to re-enroll children the state removed after Jan. 1 for failing to pay a monthly premium for Florida KidCare coverage.
“Please respond within 30 days from the date of this letter with a CAP that describes the actions the State is taking to fully comply with the statutory and regulatory requirements,” LaSure wrote.
LaSure wrote that the letter served as a preliminary notice to Florida and an opportunity for state officials to take corrective action. The letter also states that a hearing will be provided prior to the withholding of any federal money.
The Agency for Health Care Administration, which houses Florida’s Medicaid program, did not respond to request for comment on the Jan. 2 letter.
The Jan. 2 letter is one of the latest maneuvers between CMS and the DeSantis administration over the Florida KidCare program.
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Less than a week after the letter was sent, Florida filed a new challenge to the continuous eligibility requirement in federal court in Tampa, the lawsuit alleges a federal regulation “amounts to a backdoor expansion of no-cost health insurance that was never authorized by Congress.”
The DeSantis administration alleges that the final rule “threatens the integrity of Florida CHIP …”
Florida KidCare is a Medicaid expansion program for children aged 5-18 whose families earn too much to qualify for the traditional Medicaid program. Congress passed the law in 1997 and agreed to pay states roughly 15 percentage points more than the traditional Medicaid match rate. The Florida Legislature agreed to pass the optional Medicaid expansion a year later, and the federal government pays about 69 cents of every dollar spent on the program.
Unlike traditional Medicaid, which is free for enrollees, Florida KidCare enrollees are required to pay a small monthly premium. The premiums are used, along with state general revenue, to pull down federal matching dollars. The federal government, though, pays the majority of the costs of the care.
Second shot at federal court
It’s the second time the state has turned to the court to try to strike the requirement that once enrolled children remain qualified for the program for 12 continuous months.
Florida unsuccessfully challenged the continuous eligibility requirement last year arguing that the federal government tried to implement it through a frequently asked question document and overstepped its legal authority. The state appealed the ruling to a federal appeals court in Atlanta.
Attorneys for the DeSantis administration and CMS agreed to withdraw the appeal in December after CMS finalized the federal regulation implementing the 2023 law. The federal regulation took effect Jan. 1.
LaSure’s letter, and Florida’s second legal challenge, comes as the Biden administration leaves Washington and Trump’s administration is set to begin.
“What’s really quite disturbing is that the litigation, the new litigation, underscores that Governor DeSantis is not content with just violating the law and preventing children from continuous coverage in his own state. He wants to ensure that children in other states, if their governor was so inclined, would not have this protection either.”
– Joan Alker, executive director and co-founder of the Center for Children and Families and a research professor at the Georgetown University McCourt School of Public Policy.
Whether the Trump administration will stand behind the 2023 law and 2024 regulation is not clear.
“That’s a good question, and I guess we’ll have to wait and see if, if the incoming Trump administration wants to make this one of their first actions,” said Joan Alker, executive director and co-founder of the Center for Children and Families and a research professor at the Georgetown University McCourt School of Public Policy.
“As best we know, Florida is the only state in the country that’s not in compliance with this new federal protection, and it’s pretty rare for a state to be so blatantly out of compliance like this and children losing coverage as a consequence,” she said.
Alker noted that Florida could submit a request to federal health authorities that the 12-month continuous eligibility requirement be waived. But instead, the DeSantis administration is challenging the underlying regulation implementing the 2023 law. If it’s successful, Alker noted, it jeopardizes continuous eligibility requirements for lower-income children across the nation.
“What’s really quite disturbing is that the litigation, the new litigation, underscores that Governor DeSantis is not content with just violating the law and preventing children from continuous coverage in his own state. He wants to ensure that children in other states, if their governor was so inclined, would not have this protection either,” Alker said. “Because the litigation is very explicitly about taking down the entire regulatory provision that is protecting children, and CHIP with this 12 months for continuous coverage.”
KidCare expansion still on hold
The impasse between the DeSantis administration and CMS also has brought to a halt efforts to expand the Florida KidCare program to provide coverage to more children.
At the behest of then-Republican House Speaker Paul Renner the Florida Legislature in 2023 agreed to pass HB 121 which increased income eligibility for the program from 200% of the federal poverty level to 300% of the federal poverty level.
Renner pushed for the increase in income eligibility as Florida’s minimum wage increased and as the state started to unwind from the COVID-19 public health emergency.
While DeSantis signed the KidCare bill into law the CHIP program was criticized by a top-ranking official in the DeSantis administration.
During a Senate confirmation hearing AHCA Secretary Jason Weida referred to the program as a cautionary tale of broken finances and as a reason why the state should not expand Medicaid to low-income childless adults as allowable under the Affordable Care Act, the federal health insurance law often referred to as Obamacare.
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