The Arizona Supreme Court handed a major victory Friday to backers of expanded Medicaid for 400,000 Arizona residents, upholding a hospital fee that covers the state's share of the costs under the program.
The high court ruled on a challenge brought by Republican lawmakers who opposed the Medicaid expansion plan championed by former Gov. Jan Brewer in 2013. The challenge had wound its way through state courts ever since, being upheld all along the way.
Losing the assessment would have forced major enrollment cuts. The vast majority of funding for the expansion population comes from the federal government, but the state has to cover some costs.
The decision comes amid a national debate over Medicaid expansion, which was a centerpiece of former President Barack Obama's health care law. Republicans have been trying to dismantle the law in Congress but could not come up with enough votes in the Senate. Maine voters last week passed a measure that paves the way for Medicaid expansion in that state.
Lawyers with the Goldwater Institute represented the Republican lawmakers in Arizona. They argued that the hospital assessment was actually a tax that required a two-thirds vote under a voter-approved 1992 Constitutional amendment covering tax increases. Brewer only got a majority of lawmakers to back the plan.
The state's Medicaid agency and an advocacy group representing Medicaid recipients argued an exemption for fees set by state agencies means the hospital assessment is legal. Lower courts agreed with that argument.
The high court sided with the state, saying the fee was not a tax. It is "not prescribed by formula, amount or limit" and is set by the agency director.