Three dozen current and former state lawmakers challenging the way Arizona funds the state’s Medicaid expansion will argue their case before the Arizona Supreme Court.
The state high court this week agreed to hear the Republican lawmakers’ challenge to the state’s Medicaid expansion, which extended insurance coverage to more than 400,000 low-income Arizonans.
The lawmakers filed a lawsuit in 2013 seeking to halt legislation pushed through by then-Gov. Jan Brewer. The measure allowed an assessment on hospitals to pay Arizona’s share of the cost of Medicaid expansion.
The lawmakers argue that the hospital assessment is a tax and, therefore, required a two-thirds legislative supermajority.
A Maricopa County Superior Court decision sided with Brewer, a Republican, and a bipartisan coalition of lawmakers that approved the Medicaid expansion.
That decision was appealed to the Arizona Court of Appeals, which in March upheld the Superior Court decision.
Goldwater Institute, a conservative think tank representing the challengers in the case, will present a similar argument to the state’s high court, said attorney Adi Dynar.
“The strategy is still basically the same,” Dynar said. “The Legislature decided to ignore the rules that voters put in place.”
Under the terms of voter-approved Proposition 108, a two-thirds supermajority of lawmakers is required before assessing any tax. The challengers argue the hospital levy was a tax authorized by the Legislature and imposed across a broad group of hospitals.
The state appellate court rejected that argument, ruling that the state’s Medicaid director was allowed to “establish, administer and collect” such a levy on hospitals.
Even though both the lower and appellate courts sided with Brewer, the state’s Medicaid expansion still might be reformed.
Earlier this year, the state’s Medicaid agency filed a waiver seeking federal permission to require “able-bodied” Medicaid recipients to either be employed or searching for a job while enrolled. The state wants to impose a lifetime eligibility limit of five years for able-bodied Medicaid recipients.
The Centers for Medicare and Medicaid Services has not yet decided whether it will accept Arizona’s Medicaid waiver application, which could restrict or limit eligibility for tens of thousands of adults.
The Goldwater Institute’s Dynar said the state’s Medicaid waiver application has no effect on the lawmakers’ legal challenge seeking to overturn the Medicaid-financing mechanism.
“It’s really not about the Medicaid expansion, per se, it’s about the supermajority provision (and) the Legislature’s choice to ignore that provision,” Dynar said.