The Arizona Supreme Court (PDF) has ruled that Republican lawmakers can challenge the state's Medicaid expansion, setting up yet another legal battle over the federal health law's primary goal of expanding coverage.
The court rejected outgoing Arizona Gov. Janice Brewer's argument that three dozen Arizona Republican lawmakers had no legal basis for their challenge.
The legislators sought to challenge the majority vote on the state law that expanded Arizona Medicaid. The lawmakers argued the law contained a hospital tax to finance expansion to 300,000 residents and therefore required a supermajority vote. Brewer defended passage of the law, saying revenue raised from hospitals was not a tax and a majority vote was sufficient.
"While I am naturally disappointed in today's ruling by the Arizona Supreme Court, it simply means that the state now has the opportunity to fully defend the merits of our Medicaid restoration law in superior court,” Brewer said in a statement. “I am abundantly confident that Arizona will ultimately prevail, and that the state will be able to focus on implementing one of the most meaningful and critical health care policies in years, the restoration of crucial, cost-effective care to thousands of Arizonans.”
The decision clears the way for the lawmakers' suit to proceed. The Goldwater Institute is considering asking the court for an injunction to halt collection of the disputed hospital assessment, said Christina Sandefur, a senior attorney at the Goldwater Institute.
Greg Vigdor, CEO of the Arizona Hospital and Healthcare Association, called the decision a disappointment that reopens debate on policy that hospitals had believed was resolved. “All evidence has shown this to be the right policy decision,” he said. The state's newly insured have sought medical care and state hospitals have seen unpaid bills drop significantly, he said.
Hospitals surveyed by the state association reported a 33% drop in uncompensated care during the first nine months of 2014. The assessment raised $75 million in 2014 and is projected to raise $270 million in the coming year, according to the association.
Arizona's legal battle joins a federal lawsuit that threatens to limit the law's insurance expansion. The U.S. Supreme Court is scheduled to hear arguments in March on a challenge to the law's insurance subsidies available in 37 states where consumers shop for coverage on the federally operated exchange. As of Dec. 26, 6.5 million people are enrolled in health plans through the exchange. Among those who chose plans during the first month of open enrollment, 87% were eligible for subsidies.
Incoming Arizona Gov. Doug Ducey, a Republican, has said he would seek to repeal Medicaid expansion if the federal financing is withdrawn.
Follow Melanie Evans on Twitter: @MHmevans
