A judge gave the go-ahead Wednesday for the state to deny free health care over the next year to about 135,000 poor people.
Maricopa County Superior Court Judge Mark Brain acknowledged that voters mandated in 2000 that the state must provide care for everyone below the federal poverty level. And the Voter Protection Act, a provision of the Arizona Constitution, prohibits lawmakers from altering or repealing anything approved by voters without taking the issue back to the ballot.
But Brain said that does not preclude lawmakers from refusing to provide enough money to the Arizona Health Care Cost Containment System, the state's Medicaid program, to cover everyone who is eligible to enroll.
"The Voter Protection Act prohibits the Legislature from doing numerous things,'' Brain said.
"It does not require the Legislature to do anything,'' he continued. "Specifically, it does not require the Legislature to fund programs.''
And without the funds from lawmakers, Brain said Gov. Jan Brewer was free to direct AHCCCS to scale back eligibility.
Attorney Tim Hogan of the Center for Law in the Public Interest, said the judge missed the point.
"By failing to appropriate the money, they effectively repealed the provision of Proposition 204 that requires that people get health care,'' he said. And that, Hogan said, is precisely what the Voter Protection Act prohibits.
Hogan said he will seek immediate relief from the Arizona Court of Appeals.
"People are being denied (coverage) every day,'' he said.
Brewer, who came up with the plan, conceded the point.
"The human impacts are real,'' she said in a prepared statement. But Brewer said the state's financial condition made it necessary to scale back the program and turn some needy people away.
The legal fight is over what voters can mandate.
That 2000 ballot measure says anyone below the federal poverty level is entitled to free care. That figure, adjusted annually, currently is about $18,500 a year for a family of three.
Medicaid pays about two-thirds of the cost. The initiative said the state's share would be picked up by tobacco taxes, the funds from a settlement with cigarette companies and other "available sources.''
In adopting a budget for the current year, lawmakers left the taxes and settlement funds in place. But they said the budget situation left no "available'' funds and directed Brewer to scale back AHCCCS to compensate.
She responded with a plan to exclude childless adults and some parents from the program, people who Medicaid does not require states to cover.
About 230,000 in this category already enrolled on July 8, when the change took effect, were allowed to remain in the program as long as they remained eligible. But beginning that day, everyone else in this category was turned away and those who lost eligibility could not re-enroll.
Monica Coury, an assistant director of AHCCCS, said Wednesday her agency has no way to tell how many people who sought coverage were turned away as no longer eligible. But AHCCCS admitted earlier this year that the change would affect about 17,000 people in the first month alone -- and about 135,000 over the course of a year.
Hogan argued to Brain that lawmakers have no choice but to fund the program as mandated. Otherwise, he said, the constitutional provision prohibiting lawmakers from thwarting the will of voters has no meaning.
Brain, however, said that constitutional provision goes only so far.
He said, for example, that voters were entitled to require that the money the state is getting from tobacco companies must be earmarked for health care and cannot be diverted for any other use.
But Brain pointed out that another section of the Arizona Constitution spells says the state can spend money only "in the manner required by law.''
"This has been construed to mean that no money can be paid out of the state treasury unless the Legislature has made a valid appropriation for such purpose and funds are available for payment of the specific claim,'' he wrote, quoting earlier court rulings.
And Brain said the state's finances have to be taken into account.
He said the new AHCCCS eligibility rule likely would violate the Voter Protection Act if it was implemented based solely on the governor's orders.
"It does not, of course, exist in a vacuum,'' the judge wrote. "Instead, it merely affects the reality imposed by the lack of funding existing in light of the current budget provided to AHCCCS.''
Rep. Steve Farley, D-Tucson, the assistant House minority leader, said the decision, unless overturned, will have negative ripple effects.
"The more than 100,000 people cut off of health care by Gov. Brewer will flood our emergency rooms looking for care that could be handled by physicians,'' he said in a prepared statement. Farley said he remains convinced that the cutbacks violate the Voter Protection Act.