Goldwater Institute case challenging funding for Medicaid expansion to be heard

This week the Arizona Supreme Court will determine whether or not state legislators can challenge Arizona’s Medicaid expansion tax under Obamacare. The Supreme Court will hear the arguments in Tucson at the University of Arizona law school this Thursday, November 6, under a program that brings live legal proceedings to Arizona high schools and universities.

At stake is a critical voter-enacted state constitutional protection that requires two-thirds of the legislature to approve tax or fee increases. Arizona’s Medicaid expansion was funded by a new “provider tax” on hospitals, and it was not approved by the required super-majority of the legislature.

The Brewer Administration is arguing the assessment is not subject to the super-majority requirement because it is an “administrative fee” that will be set by the director of Arizona’s Health Care Cost Containment System, not lawmakers per se. Three-dozen lawmakers, represented by the Goldwater Institute, argue that the super-majority voting requirement should, in fact, apply because the legislature must authorize all new taxes or fees before they can be adjusted by an agency administrator.

“Legislators cannot make an end run around the Constitution by ceding their powers to an unelected director,” said Christina Sandefur, a senior attorney at the Goldwater Institute.

A Maricopa County Superior Court judge decided state lawmakers didn’t have standing to sue over the expansion, but the Court of Appeals disagreed and reinstated the case. The Supreme Court will make the final decision on whether or not the case can proceed. If the Court rules in the Institute’s favor, the case will go back to Superior Court and the legal issues in the case will be decided.

Twenty-eight states and the District of Columbia have expanded Medicaid as part of the Affordable Care Act. Indiana and Utah are still debating expansion; and 21 states have decided not to make the expansion. Originally, the federal health care legislation required all states to expand Medicaid or lose all federal funding. The U.S. Supreme Court struck that piece of the federal law down as unconstitutional, saying states cannot be forced to accept new rules to keep funding that was given to them under previous rules.

If the Goldwater Institute is ultimately successful in court, Arizona will be the first state in the country to have its expansion struck down by a legal challenge.

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