Gov. Jan Brewer will get a chance to stop some Republicans from trying to undermine the financing for her expansion of Arizona's Medicaid program.
The Arizona Supreme Court on Wednesday agreed to let attorneys for the governor argue that the state Court of Appeals got it wrong in concluding that GOP lawmakers on the losing end of last year's vote have the right to challenge its legality. No date has been set for a hearing.
In a prepared statement, Brewer said today's order places Arizona “one step closer to ending the baseless lawsuit.” That, she said, will clear the way for fully implementing the expansion of the Arizona Health Care Cost Containment System, the state's Medicaid program.
But nothing in Wednesday's order suggests the justices ultimately will decide to block the lawsuit by the dissident Republicans. The court could simply hear the governor's arguments, weigh them — and let the challenge go forward — just as did the state Court of Appeals.
Hanging in the balance is whether about 276,000 Arizonans who have been added to Medicaid rolls this year are going to continue to get free health care.
AHCCCS was charged by voters with providing free care for everyone below the federal poverty level. That is currently $19,790 for a family of three.
Brewer last year built a coalition of Democrats and some Republicans to expand eligibility to 138 percent of the poverty level, with the federal government picking up virtually all of the additional cost. But even with new federal dollars, there was still a cost to the state for restoring coverage for those childless adults. So Brewer crafted what she called an “assessment” on hospitals to pay that $256 million share.
Only thing is, that levy was approved by barely a simple majority. That led to a court challenge by Republicans who said that, whatever Brewer calls it, it is a tax.
More to the point, as the Court of Appeals noted, if it is a tax, there were enough Republicans in opposition to deny that two-thirds vote. If the levy were illegally enacted, Brewer's entire Medicaid expansion plan falls apart as Arizona no longer has the state money necessary to tap into cash from the federal Affordable Care Act.
The current legal battle does not directly address whether the levy is a tax. Instead the fight is over the threshold question of whether the lawmakers have standing to ask the courts to intercede.
Brewer's lawyers contend the only ones entitled to contest the legality of the assessment — and the lack of a two-thirds vote — are those directly affected, meaning the hospitals themselves.
But the hospitals did not object because AHCCCS Director Tom Betlach, crafted the levy so that the amount paid by any hospital chain would be less than what they would gain by more of their patients having health insurance.
Maricopa County Superior Court Judge Katherine Cooper dismissed the challenge, siding with Brewer in saying lawmakers had no standing to sue. But the appellate court saw the issue different.
Judge John Gemmill said what Brewer essentially is arguing is that a simple majority of the Legislature can decide when something is a tax and a two-thirds vote is needed for implementation. That, he said, defies logic as well as the plain language of the Arizona Constitution.
For example, he said lawmakers might want to raise income tax rates, and Gemmill said such a measure presumably would fall within the constitutional mandate for a supermajority vote.
Gemmill said Brewer's interpretation would allow a majority of lawmakers to ignore that constitutional provision making the tax hike effective only on a two-thirds vote. But the judge said that does not make the requirement for the supermajority go away.
“Such an omission would not defect the constitution's requirement that any bill raising the state income tax rates be passed by a two-thirds supermajority of each legislative chamber,” he wrote.
Brewer said the outcome of the battle goes beyond whether Arizonans above the federal poverty level will be able to get care. She said at issue is “the viability of our rural and safety-net hospitals” who were being overwhelmed and put at financial risk by the high percentage of people showing up in emergency rooms without insurance and otherwise unable to pay their bills.