- Associated Press - Thursday, November 6, 2014

PHOENIX (AP) - The Arizona Supreme Court had tough questions for Gov. Jan Brewer’s lawyers on Thursday as they tried to convince the justices to overturn a decision allowing a challenge to her Medicaid expansion plan to proceed.

Two justices sharply questioned how throwing out the suit would not “eviscerate” a state constitutional requirement that tax increases require a two-thirds vote of the Legislature.

Brewer wants a suit filed by 36 fellow Republicans in the Legislature challenging the 2013 law to be dismissed, as a superior court judge ruled in February. But the Arizona Court of Appeals revived the suit in April, saying their arguments that lawmakers lacked legal standing to sue didn’t hold up.

Brewer pushed through the expansion of Medicaid after an epic battle with conservative lawmakers who vehemently opposed her decision to embrace a signature part of President Barack Obama’s health-care overhaul law. They argued that because the law relied on a new hospital assessment to pay for the state’s share, it required a two-thirds vote of the Legislature under a voter-approved Constitutional amendment called Proposition 108.

But Democrats and a handful of Republicans voted against requiring the supermajority, and Brewer’s signature effort became law.

The losing Republican lawmakers, represented by Goldwater Institute lawyer Christina Sandefur, argue that lawmakers have no option but to challenge the constitutionality of the law in the courts.

“Their votes were diluted because the Constitution, when the voters enacted Prop 108, said that a minority of one-third plus one legislator were empowered to stop a tax or assessment or fee from going into law,” Sandefur told the five justices. “And here, because of the fact they had sufficient votes to defeat the bill and nevertheless it was enacted into law, the votes were diluted.”

But Timothy Berg, representing Brewer, told the justices that the opposing lawmakers had plenty of ways to overcome what he called a political defeat.

“They have political remedies,” Berg said. “They can try to repeal the bill in the next session. They could have and did try and were unsuccessful in referring it to the people. They could have tried to persuade the governor to veto the bill. All of those are political remedies that are available to members of the Legislature who are unhappy with the bill being passed.”

But two justices - Chief Justice Scott Bales and Justice Rebecca White Berch - suggested that might gut the constitution’s requirement.

“My concern is that if the Legislature gets to decide if (there is) a supermajority here, doesn’t that eviscerate the Constitution’s provision that says that it ought to be done by supermajority vote?” Berch asked.

Berg argued that lawmakers who lost the vote can’t sue, but hospitals who are on the hook for the new assessment can sue.

“I think the question is: Who has the right to challenge the stature on the grounds that it’s unconstitutional because a supermajority didn’t pass it?” Berg said. “And traditionally, the folks who’ve had a right to challenge any statute of any kind is the people to who it applies.”

The justices will issue a ruling later on whether the lawsuit can proceed.

Brewer is one of only a handful of Republican governors who embraced Medicaid expansion, a key part of Obama’s health-care law. In all, 27 states plus Washington, D.C., are moving ahead with the expansion, while 21 states have turned it down. Two additional 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 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.

Brewer, who attended the hearing, said allowing the lawsuit to proceed “could be fatal, it could be a catastrophe.”

“Let’s be perfectly clear: Preventing Medicaid restoration would threaten our safety-net hospitals and decimate our state budget, including funding for our (Department of Child Safety) and education and public safety,” Brewer told The Associated Press. “There’s a lot at stake here.”

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