A federal trial next week could force Florida’s government to reinstate Medicaid for hundreds of thousands of people and overhaul how it manages the health insurance program, at a cost of potentially billions of dollars.
One question will decide what, if any, changes Florida must make: Has Florida unfairly and illegally cut patients’ Medicaid coverage for years by failing to give a fair notice or a chance to appeal its decisions?
In a bench trial starting Monday at the U.S. District Court in Jacksonville, Judge Marcia Morales Howard is tasked with answering that question. The Florida Health Justice Project and the National Health Law Program launched the suit last August on behalf of five residents, now representing a class that likely includes somewhere between 100,000 and 900,000 Floridians.
The class-action lawsuit focuses on the way Florida informs Medicaid recipients – or, as the plaintiffs argue, the way it fails to inform them – that it will terminate their healthcare benefits based on how much money the state believes they make.
Florida has used the same system of Medicaid termination notices for years, but these notices, the lawsuit argued, caused new levels of damage after March 31, 2023. That’s when a so-called “unwinding” of Medicaid rolls began nationwide, sparked by the end of a COVID-era emergency rule that the federal government used to stop states from redetermining peoples’ eligibility for three years.
As of March, Florida had kicked people off Medicaid at the 14th-highest rate of all U.S. states since the start of the unwind, according to a KFF compilation of the latest state-by-state data. Most states logging higher disenrollment rates have significantly smaller populations, with Texas being the only one comparable to Florida in sheer enrollment total.
Florida’s total count of Medicaid enrollees had ballooned to more than 5.7 million people when the unwind began. Within one year from that point, the state had slashed more than a million of those enrollees, with the state’s Agency for Health Care Administration reporting less than 4.7 million people on its Medicaid rolls by the end of March.
During the three years in which it paused eligibility redeterminations, Florida didn’t fix any of the long-known problems with its termination notices, the plaintiffs argue in their lawsuit.
“As a result,” they state in an amended complaint filed in January, thousands of Floridians “are losing Medicaid coverage without meaningful and adequate notice, leaving them unable to understand the agency’s decision, properly decide whether and how to contest their loss of Medicaid coverage, or plan for a smooth transition of coverage that minimizes disruptions in necessary care.”
The plaintiffs have asked Howard to force Florida to reinstate Medicaid coverage to everyone cut from the program for allegedly making too much money. They also want the state to stop cutting off more people until it sets up a clearer notification process that includes a proper explanation for how they can appeal their eligibility determinations.
The case
The plaintiffs are suing two Florida agencies – AHCA and the Department of Children and Families, both of which are led by Gov. Ron DeSantis’ appointeees. AHCA administers Medicaid statewide, while DCF determines if Floridians are eligible for the benefits.
AHCA declined to comment, and DCF didn’t respond to The Tributary’s request for comment.
The judge will assess two specific aspects of Florida’s termination notices to decide if they violate the U.S. Constitution’s guarantee of due process and the federal Medicaid Act. The plaintiffs argue these notices deprive Floridians of their right to challenge income-based terminations.
The plaintiffs also argue the state’s “reason codes” are vague to the point of being illegal, with some notices offering multiple reasons that contradict each other. They contend that the state must provide people with specific information to justify its termination of their coverage – namely, the amount of income that the state believes a person is making and what the income limits are.
The state admitted its notices don’t provide individual detail, but it argues it isn’t required by law to do so. It also argues that its process shouldn’t be assessed based on “merely a reason code viewed in isolation,” as Medicaid recipients get information “through diverse channels, including parts of the notice besides the reason code, other written notices and oral communications,” it wrote in a March court filing.
The second aspect to be assessed by Howard is whether Florida’s notices properly inform people of their right to appeal the state’s termination of their benefits and maintain their existing Medicaid coverage until they get a fair hearing on that appeal.
All of the termination notices issued by DCF contain the same boilerplate paragraph on “Fair Hearings” in this regard, which currently reads:
- “If you disagree with the decision we have made, you have the right to ask for a hearing before a state hearings officer. You may be represented at the hearing by a lawyer, relative, friend or anyone you choose. If you want a hearing, you must ask for the hearing by writing, calling the call center or coming into an office within 90 days from the date at the top of this notice. If you ask for a hearing before the effective date of this notice, your benefits may continue at the prior level until the hearing decision. You may be responsible to repay any benefits if the hearing decision is not in your favor.”
The state had tweaked the final sentence of that paragraph since the filing of this lawsuit, the plaintiffs noted in their complaint. Up until last October, that sentence in earlier state notices read: “You will be responsible to repay any benefits if the hearing decision is not in your favor.”
The plaintiffs argue this paragraph is not just overly vague, but outright confusing to a degree that could misinform people of their rights. Even if those who receive these notices believe they’re still eligible for Medicaid, they may fear being saddled with new debt if their appeal fails. In fact, DCF “only authorizes the recovery of overpayments […] that are the result of ‘Fraud or intentional program violation,’” the complaint states.
Florida disputes this argument. The state says it gives people “more than enough information to protect their rights, and their questions could be answered through modest diligence.” The state also argues it isn’t required to inform people of these rights anyway.
The plaintiffs
Four of the named plaintiffs live in Jacksonville, while the fifth is a two-year-old boy who lives in Miami-Dade County. Their anecdotal experiences paint a real-world picture of the practices Florida now must defend in court.
Two of them are Kimber Taylor and her one-year-old son, whom Taylor gave birth to in May 2023.
Taylor enrolled in Medicaid when pregnant with her son. She got a notice from DCF on April 26 that declared her eligible for continued Medicaid. Her son would also be Medicaid eligible upon notification of his birth, it said, and he would remain so from “June 2023 ongoing.”
As a postpartum mother with a child under age 5, both met the requirements for one year of continuous Medicaid coverage that “should have been maintained through at least May 2024,” the complaint states. She went on unpaid maternity leave from May 11 to Aug. 1, a period in which she “did not work or earn any income.”
But nearly a month into her unpaid leave, on June 8, DCF sent her a second notice filled with contradictions.
The notice said her income was too high, even though she made no money.
It said her Medicaid benefits would end because she was eligible for a “different Medicaid coverage group” without an explanation.
It said her son, but not Taylor herself, was eligible for the Medically Needy program, which functions differently from traditional Medicaid in that it requires participants to pay a share of expenses before the state covers the rest. But another section said both she and her son were ineligible because “you are receiving the same type of assistance from another program.”
Taylor didn’t know what other program she purportedly was “receiving the same type of assistance from.”
“The notice left [Taylor] extremely confused and upset,” the complaint states. “She did not understand how a newborn and a person who had recently given birth could lose Medicaid coverage,” especially after being approved for it just six weeks prior.
Upon trying to contact DCF, Taylor waited “at least an hour” before getting through to a representative, who allegedly told her she could appeal the decision but said “she did not qualify for Medicaid because she was over income.”
The representative “did not inform [her] that she could be eligible for postpartum coverage, or that [her son] qualified for one year of Medicaid coverage” as a child under age five, per the complaint.
After reading the notice’s paragraph on fair-hearing rights, Taylor chose not to appeal, assuming she’d lose “because the DCF representative insisted that she was over income and did not qualify for Medicaid. As a new parent, she was already in debt and did not want to risk taking on additional debt that she could not repay.”
By the time her rights had later been “adequately explained to her,” Taylor could no longer appeal.
Taylor and her son lost Medicaid coverage on June 30.
She applied for an alternative plan through the federal health insurance marketplace, but was denied coverage there and “told that she should apply for Medicaid.”
The experience caused Taylor anxiety and panic attacks, per the complaint. In July, she had to pay out of pocket for her son to receive his first set of vaccines.
“The pediatrician agreed to see [her son] and give him the vaccines even though he did not have health insurance,” the complaint states. “Taylor received a bill for $555.00 from that appointment.”
Similar narratives of confusion persist across the other named plaintiffs. In the time since the lawsuit was filed, Florida has reinstated Medicaid eligibility for two of those plaintiffs, recognizing that their terminations were due to errors by the state.
A vast class of represented Floridians
On April 23, Howard agreed to expand the scope of the case so that it would ensure the trial determines the outcomes for not just the named plaintiffs but also anyone Florida has terminated or will terminate from Medicaid based on a claim that their income is too high since March 31, 2023.
Some of these people received notices with a reason code that explicitly said their income is too high; others received more vague codes that didn’t reference income; others received notices with no reason code at all.
By December, Florida had sent more than 102,000 Medicaid enrollees a notice “that denied or terminated Medicaid coverage” with a reason code that explicitly referenced their income since the start of the unwind, DCF senior management analyst supervisor Daniel Davis stated in a January court filing.
That only represents what’s likely a small portion of the Floridians who now qualify as part of the class in this lawsuit. Davis’ declaration also stated that by December, Florida had sent more than 771,000 enrollees a notice that their Medicaid was ending with one of three vaguely phrased reason codes:
- “WE REVIEWED YOUR CASE, YOU ARE STILL ELIGIBLE FOR MEDICAID, BUT IN A DIFFERENT MEDICAID COVERAGE TYPE”
- “YOU ARE RECEIVING THE SAME TYPE OF ASSISTANCE FROM A DIFFERENT PROGRAM”
- “YOUR MEDICAID FOR THIS PERIOD IS ENDING”
If income was the underlying reason for Florida’s termination of anyone who received one of these codes, that person also qualifies as part of the lawsuit class. The judge’s order notes that this was specifically the case with three of the five named defendants, and that those instances weren’t “a mistake or an anomaly.”
The state argued many of the people it kicked off of Medicaid actually were ineligible and those participants shouldn’t be a part of the lawsuit.
The judge disagreed, writing that those kicked off of Medicaid suffer from “confusion, lost time and emotional distress that stem from inadequate notice of the termination of benefits, even where the termination decision is ultimately correct.”
If the plaintiffs win at trial, the judge added, the plaintiffs’ requested injunction — restoring Medicaid coverage to those who lost it and stopping Florida from terminating coverage until it corrects its notification system — “may be appropriate to prevent those harms.”
Florida has argued that the proposed injunction would result in a “staggering price tag [that] is squarely adverse to the public interest.”
In a Jan. 12 filing, the state estimated it would cost more than $87 million per month to reinstate Medicaid benefits for people who qualified for the plaintiffs’ proposed class as of that day alone. If those reinstatements lasted one year, the cost would exceed a billion dollars.
“And their reinstatement might indeed be lengthy,” the state wrote, “given the time it would take to make the system and application changes necessary to generate notices that contain the individualized information that the proposed injunction requires.”
With that, changing DCF’s system for termination notices “might come with heavy costs” in and of itself, the state has argued.
The lawsuit could carry further financial implications.
The plaintiffs’ complaint cites a law Congress passed prior to the Medicaid unwind, which entitled states to increase federal funding in 2023 so long as those states met all federal requirements when redetermining peoples’ eligibility. That includes making “a good faith effort to contact the individual” before cutting them from Medicaid. States that don’t meet all requirements “shall not qualify for the increase” in funding, the law stated. The plaintiffs in this case argue that Florida hasn’t met those requirements.
Charlie McGee covers poverty and the safety net for The Tributary. He’s also a Report for America corps member with The GroundTruth Project, an independent, nonpartisan, nonprofit news organization dedicated to supporting the next generation of journalists in the U.S. and worldwide. McGee may be reached at charlie.mcgee@jaxtrib.org. Follow him on Twitter @bycharliemcgee.
