Goldwater Institute files suit over unconstitutional Medicaid expansion

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PHOENIX – On June 17, Governor Jan Brewer signed HB 2010 to expand eligibility for AHCCCS (Arizona Health Care Cost Containment System), Arizona’s Medicaid program, under Obamacare, despite not having the required two-thirds super-majority vote of both houses.

On Sept. 12, the day after a referendum effort failed to obtain 86,405 valid signatures to refer HB 2010 to voters, the Goldwater Institute filed a complaint in superior court on behalf of 36 legislators and three concerned citizens, asking a judge to block implementation of the bill.

The lawsuit contends the bill is unconstitutional because it did not have the required super-majority vote to levy an increase in taxes, as required by the Arizona Constitution.

In 1992, Arizona voters passed Proposition 108, a constitutional protection requiring a two-thirds majority vote by legislators in order to levy a tax increase.

The lawsuit contends HB 2010, which was signed by Brewer on June 17, expands the eligibility for AHCCCS under the Affordable Care Act (Obamacare) and funds that expansion by requiring hospitals to charge a provider tax in an amount that will be determined by an appointed official rather than the legislature.

A 2012 U.S. Supreme Court opinion on Obamacare ruled states are not required to expand Medicaid programs under the law.

The ruling effectively made states the ultimate guardians of health care freedom. While the Supreme Court decided the federal government could tax individuals who did not purchase government-approved health insurance, it also said it could not force states to expand their Medicaid programs from “a program to care for the neediest among us” to “an element of a comprehensive national plan to provide universal health insurance coverage.”

That ruling allowed states to control their own budgets, reduce federal spending by hundreds of billions of dollars and halt a critical component of the federal takeover of the health care industry.

However, Brewer called a special session of the legislature to urge lawmakers to pass the Medicaid expansion bill, despite the state’s history with Medicaid legislation and cost estimates to expand the program have exceeded projections by nearly 400 percent every year.

According to the complaint, HB 2010 passed both the House and Senate with little more than a simple majority and when the governor and her allies realized they were unable to come up with a two-thirds majority they attempted to dodge Prop. 108’s requirement by delegating the legislature’s taxing power to the director of AHCCCS, an appointed bureaucrat.

Christina Sandefur, one of the Goldwater Institute attorneys leading the case, said, “This is exactly the sort of scenario Prop. 108 was designed to prevent. 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.”

Brewer signing HB 2010 into law on June 17 marks the first time since Prop. 108’s passage, over 20 years ago, that the legislature has directly raised taxes.

Sandefur said, “If this bill is not stopped, a dangerous precedent will have been set that extends far beyond Medicaid expansion. Blocking implementation of this law is critical to preserving the democratic protections Arizonans have enshrined in their Constitution.”

Arizona voters passed the Goldwater Institute-drafted Health Care Freedom Act in 2010, protecting people’s right to make their own health care decisions and prevents federal and state governments from forcing people to participate in a health care system.

Last year Arizona rejected implementation of a state-funded insurance exchange that would have cost taxpayers millions of dollars each year, fined businesses that did not offer government-approved health insurance, subsidized private insurance companies and made the state an accomplice in enforcing Obamacare.

Although Arizona was late to join the federal Medicaid program, first implemented in 1965, when it established AHCCCS in 1982, even armed with 17 years of data and other states’ experiences with the program, it still encountered huge unanticipated costs.

In 2005, the state’s cost to expand the program exceeded projections by close to $1 billion.

The Goldwater Institute asserts Brewer embraced “underhanded and even unconstitutional tactics” in order to implement Medicaid expansion, pointing out she threatened a moratorium on all legislation until expansion passed both houses, and made good on her threat by vetoing five unrelated bills.

Brewer called lawmakers back to a special evening session demanding the Medicaid expansion be fast-tracked to approval.

The Arizona Court of Appeals affirmed Prop. 108’s purpose in Arpaio v. Maricopa County Board of Supervisors in 2010, stating it was to “prevent the legislature from enacting without a super-majority vote any statute that increases the overall burden on the tax and fee paying public.”

According to the Goldwater Institute, “The provider tax unquestionably enlarges state revenues and increases tax burdens on Arizonas.”

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