Health Insurance Expansion Tangled In Court

State lawmakers seek to reverse coverage for 300,000

Rim Country’s delegation, includes (left to right) Rep. Bob Thorpe, Sen. Chester Crandell and Rep. Brenda Barton.

Rim Country’s delegation, includes (left to right) Rep. Bob Thorpe, Sen. Chester Crandell and Rep. Brenda Barton.


Lawsuits, contradictory court rulings and election politics continue to bedevil the Affordable Healthcare Act, even now that it’s up and running.

On the state level, state lawmakers including Rim Country’s delegation, continue to press to roll back the major expansion of coverage by the Arizona Health Care Cost Containment (AHCCCS) system, which is at least for now entirely funded by the federal government.

On the national level, conflicting federal appeals court decisions have spawned confusion.

One federal appeals court decision held that although state-run health insurance exchanges can give people subsidies for healthcare based on income, the federally run exchanges cannot. That could have a big impact in Arizona and other states where the state legislatures refused to set up an exchange and the federal government stepped in to provide the coverage. The judged ruled that the section of the law discussing the insurance subsidies mentioned state-run ex­changes but said nothing about the federally-run exchanges. Congress apparently didn’t fully consider the possibility that Republican-dominated legislatures throughout the country would refuse to set up exchanges.

On the other hand, another federal appeals court came to the opposite conclusion. That decision upheld the provisions that allowed the Internal Revenue Service to give tax credits to people to offset the costs of buying insurance through both the state and federally run exchanges. Although the justices found language in the law “ambiguous and subject to multiple interpretations,” they concluded Congress clearly intended for people to receive the subsidies through either state or federal exchanges.

The conflicting appeals court decisions will almost certainly require the US Supreme Court to step in with a ruling to resolve the issue, probably early next year – after the election. The Supreme Court on a 5-4 vote has already upheld the constitutionality of the law once, although the justices said the federal government could not threaten to pull all healthcare funding in states that refused to expand their Medicaid programs to cover impoverished adults and families making up to 138 percent of a poverty line wage.

That’s exactly what’s at stake at the state level, as a result of another set of conflicting legal rulings.

Gov. Jan Brewer fought a bitter political struggle with legislative Republicans to expand AHCCCS coverage to about 300,000 people. The federal government paid 100 percent of the cost through the Affordable Healthcare Act, but critics worry that the federal government will eventually cut back the share of the cost it pays, leaving the state to pay the difference.

Gila County enrollment in AHCCCS jumped 19 percent last year, one of the biggest increases in the state. AHCCCS provides healthcare for 31 percent of Gila County residents, with the federal government paying about two-thirds of the cost.

AHCCCS provides coverage through a health maintenance organization approach, which has become something of a national model based on costs, patient outcomes and patient satisfaction. However, people report long waits trying to establish eligibility through the health exchanges.

Voters had twice previously approved ballot propositions to expand AHCCCS coverage with tobacco tax money, but during the recession the legislature cut eligibility, which cost about 250,000 people their healthcare.

Once the federal government offered to pay 100 percent of the cost of again extending coverage to those groups, Gov. Brewer called on a coalition of moderate Republicans and Democrats to approve the expansion. She argued the expansion would create 31,000 jobs and to the state. Hospitals agreed to pay a $108 million surcharge on their bills to cover any state costs, in hopes the broader insurance coverage would cut their hefty bill for uncompensated care.

Rim Country’s delegation, including House Representatives Brenda Barton and Bob Thorpe and Sen. Chester Crandell, all staunchly opposed the expansion.

When it passed with the votes of all the Democrats and a handful of moderate Republicans, 36 lawmakers on the losing side of the vote then sued the state in hopes of undoing the expansion. They argued that voter approval of Proposition 108 years ago requires a two-thirds vote to approve any tax increase.

A superior court judged ruled that only the hospitals had the legal standing to challenge the imposition of the hospital surcharge. The judge ruled that it would create legal chaos if any lawmaker who lost a vote could sue to overturn the outcome of the political process.

The suing lawmakers appeal­ed that ruling. Recently, the Arizona Court of Appeals reversed the lower court and said the lawmakers did have the legal standing to pursue their lawsuit.

Supporters of the expansion have now appealed that ruling, which means the State Supreme Court will have to decide whether the lawsuit can proceed. Nineteen lawmakers and a bipartisan coalition that includes the Arizona Department of Com­merce and Industry, the Phoenix Chamber of Commerce, Southern Arizona Leadership Conference and even former Gov. Fife Symington filed brief’s in support of Gov. Jan Brewer’s position.

No court has yet ruled on whether the hospital surcharge really is a tax, subject to the two-thirds rule.


jeffrey Aal 2 years, 5 months ago

Lets at least have an honest discussion here? Please substitute “tax payer” for your use of the term “federal government” in the following three lines. There is no free lunch. The tax payer foots the bill.

"The Tax Payer paid 100 percent of the cost through the Affordable Healthcare Act," "(W)ith the Tax Payer paying about two-thirds of the cost...." "Once the Tax Payer offered to pay 100 percent of the cost...."


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