Arizona Court Battle

Is it a tax or is it an assessment? That question is at the heart of a court battle brewing in Arizona over the fee that supports our state’s share of expanded Medicaid coverage.

From KJZZ Radio in Phoenix:

The fate of Arizona’s Medicaid expansion is now in the hands of the Arizona Court of Appeals.

On Tuesday, the court heard the latest challenge to the long-running lawsuit brought by Republican lawmakers.

In the early 1990s, Arizona voters amended the Constitution so any new tax requires a two-thirds majority from the Legislature. But there is an exception, which allows state agency directors to impose an assessment. That’s what happened with Arizona’s Medicaid expansion. The director of AHCCCS required hospitals to pay a fee and, in turn, many of them benefited from a substantial drop in uncompensated care. Because of the Affordable Care Act, the federal government covers most of the costs for the expanded eligibility, but the state’s contribution comes from that assessment.

Opponents of the expansion, however, argue the fee was an illegal tax.

More than 400,000 Arizonans get free or low-cost health care through the Medicaid expansion program, according to a report on That report also quoted former Governor Jan Brewer, who engineered the program’s funding, as saying she is proud of what expanded Medicaid has become in our state.

“It was really, actually, the only solution for the people of Arizona facing the crisis that we were facing,” the former governor said Tuesday, as she showed up in court to personally watch the arguments. “I think it was the right thing to do,” Brewer continued. “It saved lives. It insured more people. It brought money into the state. It kept rural hospitals from being closed down.”

However, in an online story, opponents of the program claimed – “that a hospital assessment used to pay the state’s share of the Medicaid expansion is a tax that required a two-thirds legislative majority to enact.” Supporters argued “the enactment of an assessment on hospitals to pay for the expansion was not a tax and was lawfully approved.”

The Arizona Hospital and Healthcare Association (AzHHA) is actively involved in this court battle. AzHHA’s Vice-President of Strategy and General Counsel, AnnMarie Alameddin, filed an amicus brief on behalf of member hospitals that supports the constitutionality of the assessment.  

We will continue to follow this story and let you know how the decisions made will affect the people of Arizona. Working with our partners to drive better health in our state is one of our highest priorities. Because the healthier we are, the closer we get to our long-term goal of one day making Arizona the Healthiest State in the Nation!

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