Opponents of expansion ask judge to block implementation of new law
Phoenix, AZ—Thirty-six Arizona state legislators and three concerned citizens have sued Governor Jan Brewer over the unconstitutional expansion of the Obamacare Medicaid program passed by the Legislature earlier this year, asking a judge to block implementation of the new law.
In a lawsuit filed by the Goldwater Institute in Maricopa County Superior Court Thursday, plaintiffs argue that the recent expansion of the Obamacare Medicaid program led by Governor Brewer violated Proposition 108, a constitutional protection passed by Arizona voters in 1992 to require a two-thirds majority of legislators whenever levying a tax increase. The lawsuit also asserts that the legislation expanding the Obamacare Medicaid mandate violates state separation-of-powers doctrine.
This June, Governor Brewer called legislators into a surprise special session to approve an expansion of Arizona’s Medicaid program (AHCCCS) under Obamacare. Thanks to the 2012 U.S. Supreme Court decision on the federal health care law, states are no longer required to expand Medicaid programs under the law. Still, Governor Brewer and key allies urged lawmakers to pass expansion, despite previous experience with Medicaid legislation in which cost estimates to expand the program exceeded projections by nearly 400% each year.
To fund Arizona’s obligations, supporters of expansion opted to charge hospitals a mandatory provider tax. In order to qualify for funding, federal law requires Arizona to collect the tax from hospitals regardless of whether they accept Medicaid payments. When Governor Brewer and key allies realized they were unable to muster the two-thirds majority required by the Arizona state constitution to pass expansion, they attempted to dodge Prop 108’s requirements by surrendering the Legislature’s taxing power to the director of AHCCCS, an unelected bureaucrat.
The Obamacare Medicaid expansion—and the provider tax that will fund it—passed both state legislative bodies with little more than a simple majority vote, falling short of the constitutionally required minimum necessary to approve a new tax. Structurally, the expansion also violated critical separation-of-powers provisions by relinquishing the taxing power to the AHCCS chief, who is now empowered to set tax rates and give exemptions to select hospitals.
“This is exactly the sort of scenario that Prop 108 was designed to prevent,” said Christina Sandefur, one of the Goldwater Institute attorneys leading the case. “By enacting a tax without the two-thirds majority required by our Constitution, the state has disenfranchised citizens whose representatives opposed the tax. Legislators are beholden to their constituents, but bureaucrats have no such accountability.”
The Obamacare Medicaid expansion marks the first time that the Legislature has directly raised taxes since Prop 108’s passage in 1992, an indication of the constitutional protection’s strength when followed.
“If this bill is not stopped, a dangerous precedent will have been set that extends far beyond Medicaid expansion,” said Sandefur. “Blocking implementation of this law is critical to preserving the democratic protections Arizonans have enshrined in their constitution.”
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More information about the case can be found here: http://goldwaterinstitute.org/sites/default/files/Medicaid%20expansion%20challenge%20backgrounder-afw_0.pdf