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Supreme Court Upholds Medicaid Expansion

On November 17, the Arizona Supreme Court unanimously ruled that the expansion of Arizona’s Medicaid program was constitutional in Biggs v. Betlach. At issue in the case was whether Arizona’s decision to extend health care benefits to over 400,000 Arizonans under the Affordable Care Act was unconstitutional because it was not approved by the two-thirds majority of legislators that is required for a tax increase. The Center intervened in the case on behalf of low-income individuals who became eligible for health care benefits as a result of the expansion.

In 2013, then Governor Brewer supported legislation to take advantage of the opportunity under the Affordable Care Act to expand health care coverage to low-income individuals in Arizona. For states that chose to expand their coverage, the federal government would pick up almost all of the costs. In a hard-fought battle at the legislature, Governor Brewer prevailed when a majority of legislators voted to approve the expansion.

The legislators who opposed the Affordable Care Act and the Medicaid expansion filed a lawsuit claiming that the assessment imposed on hospitals to pay the state’s share of the expansion constituted attacks that required a two-thirds majority vote to approve in each house of the legislature. The director of AHCCCS was named as a defendant and we intervened to ensure that the legislation was vigorously defended. We argued that the hospital assessment was not a tax and that it was exempt from the two-thirds requirement by virtue of an explicit exception in the Constitution for assessments that are authorized by statute but that are not prescribed by a formula, amount or limit and which are set by a state officer. Both the trial court and the Court of Appeals agreed in decisions holding that the assessment was not a tax and that it was exempt from the two-thirds vote requirement.

The Supreme Court agreed with the decisions and held that the hospital assessment was not a tax and that it was exempt from the two-thirds vote required for tax increases. The Court’s decision means that over 400,000 Arizonans who became eligible after the extension will continue to receive healthcare benefits.