State agency puts $100 million in reserves meant for kids’ health insurance program

In July, the three subsidized Florida KidCare programs covered 161,611 kids, while a December forecast planned for 211,735 enrollees. (Photo by Johner Images/Getty)

The Florida Agency for Health Care Administration is putting $100.7 million in reserves because the state overestimated the number of kids who would receive health insurance through a program meant for low-income families.

An official with the agency told lawmakers on the Legislative Budget Commission on Friday that the change would realign Florida KidCare’s budget with the most recent enrollment and expenditure estimates, which predict that 482,474 fewer children will be enrolled in the program by next July.

That adjustment stems from a July budget estimating conference, during which state economists and officials in charge of KidCare had to figure out why their previous predictions were “woefully wrong.”

“We have Florida Healthy Kids Corp. They’re kind of in charge of that in getting out notifications to families who could potentially be eligible for this program,” said Tom Wallace, AHCA’s deputy secretary for health care finance and data, during the Friday meeting.

“When a Medicaid application goes to the Department of Children and Families and they do not qualify for Medicaid, we would refer them over to Florida Healthy Kids to see if they qualify for the CHIP program,” he continued. CHIP is the common term for states’ subsidized health insurance programs for kids.

Wallace referred further questions about the follow-up process for families rejected for Medicaid to Florida Healthy Kids.

The budget commission comprises state House members and senators who adjust the state budget to reflect shortfalls or excesses in money available for programs.

The previous predictions accounted for changes that didn’t happen

Between June and July, officials estimated that 4,302 more children would enroll in the largest subsidized plan offered through KidCare than already were covered.

Instead, 936 fewer kids got health insurance through Florida Healthy Kids, which covers children ages 5 through 18. Officials had relied on the planned KidCare expansion to make up for the number of children the state kicked off Medicaid following the end of continuous coverage under the COVID-19 federal public health emergency.

But the state hasn’t enacted the expansion because it hasn’t gained approval from the federal government amid an ongoing legal dispute regarding premium payments.

"What we were thinking was going to happen is you had the flow-through from Medicaid. As they were disenrolling people, you would be picking them up, is what we thought that would be," said Amy Baker, coordinator of the Office of Economic and Demographic Research (EDR), during a July 10 meeting.

"And I can do that probably until June that we were just woefully wrong on the pickup coming out of Medicaid to you all," Baker said.

But during the July estimating conference, an official from Healthy Kids Corp. placed some of the blame for not being able to enroll as many children as projected on a lack of contact information for families who lost Medicaid coverage.

"There was a significant number of that population that came to us without that contact information, leaving us simply to rely on paper letters to share the information," said Ashley Carr, Florida Healthy Kids' chief marketing officer.

"Whereas we know the more effective tactics are things like text messages and phone calls. So, there were a lot of nuances in place, but we certainly ran an aggressive marketing campaign, and we're pleased with the results that we did see come in."

Premium payment dispute

While AHCA stashes away the KidCare funds, the state continues its legal challenge to the Biden administration rule requiring states' subsidized health care programs for kids to provide continuous coverage for a year, even if parents stop paying premiums. Families with incomes up to 200% of the federal poverty rate qualify for the subsidized branch of KidCare, meaning that they pay $15 or $20 in monthly premiums.

With an appeal pending on the state's challenge to the rule, Florida KidCare continues revoking health care coverage for kids whose parents don't pay the premiums. Between January 2023 and July 2024, more than 21,000 kids in the subsidized programs lost coverage for nonpayment, Carr wrote in an Aug. 29 email to Florida Phoenix. She added that the number accounted for 8.3% of the membership population.

When the Phoenix asked for a monthly breakdown of the disenrollments, Carr responded, "NO."

The number of kids who lose coverage fluctuates throughout the year, Carr said during the July conference, referring to families who come in and out of the program as "seasonal droppers."

"The seasonal droppers tend to be consistent year over year," she said. "They're giving way to other expenses, summer camp, back-to-school supplies, Christmas gifts, that type of thing. And then they'll come in, and they're basically hedging that their child will stay healthy in the off months."

KidCare expansion remains in limbo

There's another reason state economists and Florida Healthy Kids expected a boost in the growth of the programs: an expansion of the income eligibility that state lawmakers passed in 2023. This expansion increased the income level to qualify for the subsidized KidCare programs from 200% to 300% of the federal poverty level.

However, the expansion hasn't happened yet, following a delay by AHCA in submitting a waiver to the federal government. The previous enrollment forecast shows the state expected nearly 20,000 kids to enroll in Florida Healthy Kids in April because of the expansion.

Broward County Democratic Rep. Christine Hunschofsky, who was the only one asking Wallace questions during the budget amendment deliberations, said she's concerned that people who qualify for KidCare aren't able to access the program.

"They may not be aware of it, there may not be the appropriate follow-up. Our office is still getting constant constituents reaching out to us that they've been kicked out of services that they are eligible for and things like that," she said. "So, this is really a concern of mine given the situation many people find themselves in."