Under State and Local Tax Refund Summary: What if our State refunds were taken due to medical bills? Should I delete it since we didn't receive it?

No, don't delete it.  If the state refund was taken to cover medical bills for you or your family or dependents, they would still be considered "received" for purposes of the calculation.  

However, if you did not itemize and take the state tax payments as a deduction the prior year, they likely aren't taxable to you for this year.

Please see this link for more details:  Are my State and Local Refunds Taxable?

Also, one other thing to note is that a portion of your Medical Expenses could be deductible.  This would apply to any medical expenses you paid during 2019 as well as the amount of the medical expenses that were paid by your refund.  Here is some more detailed information regarding the medical expense deduction:  Medical Expenses