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Updated May 14, 2014 - 4:29 pm

Gov. Jan Brewer appeals ruling in Medicaid expansion suit

PHOENIX -- Arizona Gov. Jan Brewer has asked the Arizona Supreme Court to overturn a ruling that revived a lawsuit challenging her expansion of the state's Medicaid insurance plan for the poor.

Brewer's lawyers filed the appeal Wednesday, arguing that the Arizona Court of Appeals ruling would open the door for lawmakers on the losing side of legislative fights over assessments or fees to rush to the courthouse.

``Permitting the appellate decision to stand confuses and misapplies existing Arizona Supreme Court case law and would set a disturbing precedent in Arizona- one that would result in our courts acting as referees in the legislative process, and also opening a Pandora's box for future baseless, politically charged lawsuits,'' Brewer said in a statement.

She also said that if the courts block her plan, thousands of Arizonans would lose access to health care, hospitals will be financially damaged and the state budget will be negatively affected.

The appeals court's April 22 ruling said lawmakers have the right to sue over a hospital assessment that funds the expansion. Republicans in the House and Senate sued last year, arguing that the assessment it is essentially a tax that required a two-thirds majority vote to pass. Only a bare majority passed the expansion.

A Maricopa County judge in February dismissed the case, saying lawmakers did not have the right to sue. The judge said it is the legislature itself that decided if a supermajority vote is needed.

But the appeals court rejected that decision and sent the case back to Judge Katherine Cooper for more action. In an 11-page ruling, the unanimous three-judge panel said the 36 Republican lawmakers who sued could have defeated House Bill 2010 if the supermajority vote was required, so it was proper for Cooper to decide if the Arizona Constitution required that vote.

Brewer wants that decision overturned and Cooper's initial ruling reinstated.

The appeals court ruling was a major loss for Brewer, who pushed the Medicaid bill through the Legislature by cobbling together a coalition of minority Democrats and 14 Republicans.

Christina Sandefur, a Goldwater Institute attorney who represented the Republican lawmakers, said the appeals court ruling allows for a court review of the legality of the assessment and whether a two-thirds vote was required.

``This is not an argument about policy or politics. It is a fight to preserve principles,'' Sandefur said in a statement. ``If lawmakers want to transform Arizona's Medicaid program, they must do it in a manner that complies with the Constitution and that does not close the courtroom doors to those who seek to defend the rule of law.''

Brewer is one of only a handful of Republican governors who embraced Medicaid expansion, a key part of President Barack Obama's health care law. In all, 25 states plus Washington, D.C., are moving ahead with the expansion, while 19 states have turned it down. An additional six states are weighing options.

The hospital assessment is expected to collect $256 million in the state's 2015 budget year to pay the state's share of expanding Medicaid to an estimated 300,000 more people. Those to be covered include people earning between 100 percent and 138 percent of the federal poverty level- $23,850 and $31,721, respectively, for a family of four this year- and childless adults making less than that who lost optional coverage provided by Arizona during a state budget crisis.

The federal government pays for most of the expansion costs, but restoring optional coverage that Arizona voters have twice approved required the assessment.

Hospitals strongly backed it because they expect to see a much bigger reduction in the cost of treating uninsured patients. Cooper had noted that hospitals did not sue and are the only potentially injured party with a right to oppose the assessment.

The underlying argument is whether the assessment is really a tax. Brewer's staff has argued that the Republican-controlled Legislature has repeatedly increased fees and assessments in recent years without imposing the two-thirds vote requirement.

The governor herself repeated that argument in an interview following a Wednesday afternoon event.

``I believe that we have seen it happen numerous times previously when they've given directors the authority to assess an assessment,'' Brewer said of the Legislature.

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