Arizona is now officially challenging Congress and the Obama administration over the new federal health care law.
Gov. Jan Brewer announced Friday that Arizona is the 20th state in the litigation which contends that key provisions of the law, signed by the president earlier this year, are unconstitutional. The National Federation of Independent Business also is now a plaintiff.
State lawmakers voted last month to authorize Brewer to join the lawsuit after Attorney General Terry Goddard refused. Goddard said he found nothing illegal in the new federal law, saying that, at best, it amounted to some financial coercion of states.
But Brewer — and the Republican legislators who voted to sue — doesn’t see it that way.
The challenge focuses on two key provisions of the law.
One will require most individuals to purchase or otherwise obtain health insurance. Those that do not will face fines.
The other increases the share of each state’s Medicaid costs it will pay — but not for nearly a decade. But to qualify, states are forbidden from scaling back their existing health programs.
That penalty is even more significant: Any state that reduces coverage would lose all future federal Medicaid dollars. That is crucial, as Arizona now gets about $2 from Washington for every dollar it now spends on the Arizona Health Care Cost Containment System, the state’s Medicaid program.
Goddard, the presumed Democratic nominee for governor — and Brewer’s foe if she survives the Republican primary — rejected arguments that amounts to an unconstitutional mandate on sovereign states. He said it is simply a condition for getting federal cash: States that want money from Washington have to live by the conditions attached.
But gubernatorial press aide Paul Senseman said that ignores the reality that states have become fiscally dependent on Medicaid dollars.
“They know full well that they could never turn it down,” he said. “And that is the design.”
The situation is particularly acute in Arizona, where lawmakers, seeking to cut spending to balance the budget, voted to scale back eligibility for the program. The net effect would be to eliminate more than 310,000 people from the AHCCCS rolls.
Lawmakers also voted to totally eliminate the Kids Care program which provides nearly free insurance to children of families who earn too much to qualify for AHCCCS but are still considered “working poor.”
Facing the threat of a $7.8 billion annual cut in federal funding, lawmakers voted to keep Kids Care alive and conditionally restore AHCCCS eligibility if some new federal stimulus dollars become available.
Senseman said the cost to state taxpayers if Arizona has to maintain both programs until 2019 is $11.7 billion.
After that, the federal law actually would pick up a larger share of state costs. But Senseman said that presumes Congress hasn’t scaled it back by then to deal with the deficit.
The other part of the multi-state lawsuit pertains to the mandate on individuals to buy insurance. Senseman said filing suit is necessary to protect the rights of individual Arizonans.
“For the first time in American history, they’re requiring individuals to purchase a private product,” he said.
Goddard disagreed with characterizing the provision as a requirement to buy anything. He said individuals are free to go without coverage — if they’re willing to pay the annual fines.
Voters themselves will get a chance to weigh in on the issue this fall.
A measure on the November ballot would constitutionally override any law, rule or regulation requiring individuals or employers to participate in any particular health-care system.
If approved by voters, it also would prohibit fines or penalties on anyone or any company for deciding to buy health care directly. Doctors and health-care providers would remain free to accept those funds and provide those services.
And it would overrule anything that prohibits the sale of private health insurance in Arizona.
Whether any of that would protect Arizonans from the federal health care plan is questionable, as federal law generally preempts state statutes or constitutional provisions.