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Arizona plan to cut Medicaid rolls headed to court

April 15
02:14 2011

Gov. Jan Brewer

PHOENIX: Gov. Jan Brewer’s plan to help balance the state’s budget by providing government-paid health care to fewer lower-income Arizonans is headed to court.
A lawyer for one of several liberal-oriented public interest law firms preparing to challenge Brewer’s plan said their lawsuit will be filed soon, probably with the Arizona Supreme Court.

The key issue in the case will be whether Brewer’s plan to shrink enrollment in the state’s Medicaid program by roughly 138,000 people through sign-up freezes over the next year violates the Arizona Constitution’s protections for voter-approved laws.

Arizona voters in 2000 approved a ballot measure that mandated an expansion of eligibility for the Medicaid program, the Arizona Health Care Cost Containment System.

The 2000 ballot measure requires that money from a settlement paid by tobacco companies to the state be used to pay for increasing Medicaid eligibility. But the 2000 law also said the state had to use “any other available sources” of money if the tobacco settlement money didn’t pay for the entire cost.

The settlement money and tobacco tax proceeds available for health care haven’t been enough to pick up the tab, and the state has used regular appropriations of tax dollars to fill the gap.

But with the state’s ongoing budget crisis and shortfalls of $1 billion or more in recent years, Brewer and Republican legislators said the state cannot afford to keep paying for the full eligibility increase.

And that will be the crux of the state’s argument in defending against the promised lawsuit, said Senate Appropriations Chairman Andy Biggs, R-Gilbert.

“We have no other available funds,” Biggs said, adding that the approved budget’s spending cuts throughout state programs and services should convey that reality to any judges hearing the case.

An attorney preparing the planned challenge said the “available” argument used by the budget’s proponents attempts to skirt the 2000 voter-approved law’s requirement that eligibility be increased to cover people with incomes up to 100 percent of the federal poverty level.

“That’s a mandatory directive,” said Tim Hogan of the Arizona Center for Law in the Public Interest. “I understand how they want to abbreviate this, but the language is pretty strong.”

Besides, Hogan said, there’s plenty of discretionary spending throughout the $8.3 billion budget.

Hogan said he was unaware of any applicable prior court ruling on what “available” funding means but that a 2009 state Supreme Court ruling might have some bearing.

That ruling said lawmakers and Brewer violated the constitutional protection for a voter-approved law creating an early childhood program when they raided interest on the program’s funding.

The violation was clear from both the wording and the obvious intent of that voter-approved law, since-retired Justice Charles Ryan wrote in the unanimous 2009 decision.

An expert on Arizona constitutional law said the argument that no money is available seems weak.

“That would mean the requirement to fund it if you have available funds would only have meaning if you have a state surplus,” said Paul Bender, an Arizona State University law professor.

“And you have to give some meaning to that (voter-approved law) that is consistent with the voters’ to make this a high funding priority,” he added.

If the budget’s $510 million cut in AHCCCS’ funding is reversed as a result of the anticipated court case, legislators have only two options, said Sen. Ron Gould, vice chairman of the Senate Appropriations Committee.

The Lake Havasu City Republican said the options would be a resumption of borrowing that majority Republicans largely eschewed in the new budget and new, deeper spending cuts.

“I think there’s still a lot of stuff that could be cut,” Gould said, acknowledging that reductions midway through the new fiscal year could devastate the programs involved

-AP

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