JOHN YANG: The end of pandemic era protections for Medicaid participants as so far meant the end of coverage for more than 17 million low income Americans and states are still checking to see if more recipients are no longer eligible a process known as unwinding.

Now the federal government is raising questions about that process, especially when it comes to children.

In December, the Department of Health and Human Services sent letters to the nine states with the highest number of children losing coverage, telling them that they must do more to keep children in the program.

One of those states is Florida, which is considering other changes to the way it provides health insurance to children from low to moderate income families, expanding access for some limiting it for others.

Ali Rogin has more.

ALI ROGIN: Since the Medicaid unwinding began last spring, Florida has removed 420,000 children from the roles of both Medicaid and CHIP, the Children's Health Insurance Program.

CHIP ensures children from families with modest income, but that make too much money to qualify for Medicaid.

Florida is also challenging a federal law that went into effect at the beginning of this year, requiring states to provide children with 12 months of continuous Medicaid or CHIP eligibility.

But Florida also took steps to expand CHIP eligibility voting last year to increase the amount of income a family can have before they no longer qualify for children's health insurance programs.

Daniel Chang is a correspondent based in Florida for KFF Health News here to break it all down for us, Daniel, we have the Medicaid situation.

We have Florida's CHIP situation.

Can you tell us broadly, what is the state of health insurance for children in Florida right now?

And if you can, how does it compared to what's happening in other states right now.

DANIEL CHANG, Correspondent, KFF Health News: So Florida has a children's health insurance program like pretty much every other state does right now.

And last year, it had about 120,000 children in it.

It's a program for low and moderate income families.

And what Florida is doing is it's contesting the federal government's authority to essentially change the rules of how kids stay enrolled in the program.

What Florida is saying is that it should be allowed to disenroll children from the Children's Health Insurance Program if their parents don't pay premiums, they get a 30-day grace period after that.

But starting January 1, the Centers for Medicare and Medicaid Services, the federal regulator, Tory authority said that you can no longer disenrolled children for non-payment of premiums, you can only require them to pay the first month after that if their parents don't pay, you have to leave them on for at least another 11 months.

Florida says that's not fair.

We've always been able to disenroll kids from CHIP if their parents didn't pay the premiums.

We need that money to fund the program.

And it's accusing the Feds and basically not following the process that's required for creating new rules like this.

ALI ROGIN: Are there any other states who are bringing up the same concerns as Florida is are they out on their own on this one?

DANIEL CHANG: Currently, Florida is the only state that I'm aware of that has challenged the federal government's new rule, although there are 18 other states that do use the same process, meaning that they will disenroll children from chip if their parents don't pay them on the premiums.

So those 18 other states will have to decide if they want to follow the new federal rules or join Florida and its lawsuit.

ALI ROGIN: And how is the Biden administration responding right now to Florida suit?

DANIEL CHANG: Well, the Biden administration just filed its first response this week.

And essentially what the Biden administration is saying is, is that the Consolidated Appropriations Act of 2023 changed the rules in two fundamental ways.

ALI ROGIN: If I can interrupt you quickly, that is the bill that established this 12-month continuous eligibility period.

DANIEL CHANG: That's correct, Ali.

And so the new rules under that law went into effect on January 1st.

And essentially what the Biden administration is saying is that the law no longer allowed continuous eligibility to be optional.

It's now mandatory for both Medicaid and CHIP with the Biden administration is saying essentially, that states were never allowed to disenroll people from Medicaid for non-payment of premiums during a continuous eligibility period.

And now the same has to apply to kids and CHIP, they have to have that same protection.

And that's essentially what the Biden administration is arguing.

ALI ROGIN: So at the same time, this chip, stuff is happening.

Florida has also come under scrutiny from the federal government for disunrolling what the HHS says is a very high proportion of children from the Medicaid rolls.

Why is Florida coming under specific scrutiny for this?

And does it have anything to do with the fact that it's one of 10 states that did not expand Medicaid coverage during the Affordable Care Act?

DANIEL CHANG: So Florida has disenrolled a large number of children from its Medicaid program, it's up to close to 460,000 as of the report from January, and HHS Secretary Xavier Becerra sent a letter to Florida and the governors of eight others states expressing concern about that and suggesting measures strategies the states could take to help keep their kids covered.

One of them relates to just eliminating premiums in the CHIP program.

Others involve persuading states to take up what the federal government calls flexibilities for this unwinding process.

So for instance, allowing states to just determine a kid's eligibility and reenroll them in the in the program.

There's a large number of dis enrollments during Florida's Medicaid on wine that are due to procedural reasons, which is often when paperwork isn't returned, or people don't respond.

Medicaid expansion is another strategy that the Secretary cited in his letter to governors as helping to improve coverage for children because when parents have health insurance, it's a lot more likely that their kids will also be insured.

ALI ROGIN: At the same time, all of this is happening, the Florida legislature voted to raise the family income limit to qualify for Kid Care, which is basically the Children's Health Insurance Program in Florida.

So what's the status of those efforts?

And how many children would that state legislature action, potentially provide coverage to.

DANIEL CHANG: Governor DeSantis signed that expansion for CHIP into law in June.

And essentially what it did is that it raised the income eligibility level, so about another 40,000 or so children would be newly eligible once that chip expansion takes effect, but it hasn't yet because there's a complicated process for states to do this.

And it involves having state and federal public comment periods and Florida hadn't done that and now they have to.

The state wanted to start the expanded population for CHIP this year.

If they do it would have to be later, much later in the year right now, they've just started recently, the state public comment period.

ALI ROGIN: I think people hearing this might wonder to themselves why Florida is taking some measures to expand eligibility, vis-a-vis, income, but choosing other options that would effectively keep other children disenrolled.

DANIEL CHANG: Well, what Florida's claiming is that those premiums helped to fund the CHIP program, and they were counting on it to fund the coverage for the expanded population.

Florida collects about $30 million a year in CHIP premium payments, and they're estimating that the first full year of this program under the expansion would cost about 90 million.

So that remainder would be paid between the state and federal governments.

And you know, about 3000 kids in any given month are disenrolled from CHIP for their parents not paying the premium.

So part of what CMS wants to do with this new rule of continuous eligibility and continuous coverage is to reduce what's called turn, kids falling in and out of coverage, having interruptions in their coverage, which is which is never good.

ALI ROGIN: Daniel Chang for the health reporter for kFS health news.

Thank you so much for your time.

DANIEL CHANG: You're welcome.

Thank you for having me.