TALLAHASSEE, Fla. (WCTV) – After a U.S. district judge rejected its arguments, Florida is going to an appeals court in a dispute about new federal guidelines in a program that provides subsidized health insurance to children.

Attorney General Ashley Moody’s office and lawyers for the state Agency for Health Care Administration on Monday filed a notice that they were appealing the May 31 ruling by U.S. District Judge William Jung to the 11th U.S. Circuit Court of Appeals.

As is common, the notice does not detail arguments the state will make at the Atlanta-based appeals court.

The lawsuit, which Florida filed in February in Tampa, challenges coverage-related guidelines in the federal 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.

The new guidelines 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. The state contended that federal officials violated a law known as the Administrative Procedure Act and sought a preliminary injunction to block the guidelines.

But Jung denied the preliminary-injunction request and dismissed the lawsuit against the federal Centers for Medicare & Medicaid Services and the U.S. Department of Health and Human Services.

Jung ruled that Florida needed to pursue an administrative challenge at the Centers for Medicare & Medicaid Services, rather than filing the lawsuit in district court. The federal agency issued the guidelines in fall 2023 through what is described in Jung’s ruling as a “frequently asked questions,” or FAQ, document.

“CMS (the Centers for Medicare & Medicaid Services) released the FAQs and requested amended CHIP (Children’s Health Insurance Program) plans from states that treated nonpayment of premiums as an exception to continuous eligibility,” Jung wrote. “Rather than submitting an amended plan or risking an adverse determination, Florida filed this action in federal court seeking a preliminary injunction. This Florida cannot do.”

He also wrote that it “is undisputed that any analysis of Florida’s APA (Administrative Procedure Act) claims will largely turn on properly interpreting the Medicaid and CHIP statutes. Interpretation of these statutes falls squarely within CMS’ realm of expertise, especially considering Medicaid and CHIP’s recognized complexities.”

U.S. Department of Justice attorneys have argued that the guidelines properly carry out a federal law known as the Consolidated Appropriations Act, 2023, which 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.

Florida’s 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 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.

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