/ Modified nov 17, 2017 11:48 a.m.

Arizona Supreme Court Upholds Medicaid Expansion Fee

The justices ruled the money, which helps cover cost of 400K Medicaid recipients, is not a tax.

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The Arizona Supreme Court upheld a hospital fee that helps cover the cost of 400,000 Medicaid recipients in the state.

The hospital assessment was approved by a majority of the Legislature in 2013.

A group of Republican lawmakers sued, claiming the assessment was a tax and had to pass by a two-thirds majority, as laid out in the Arizona Constitution.

The justices disagreed that the assessment is a tax. They reasoned that not all hospitals must pay and the money goes to a specific fund and may be used only for Medicaid. They said taxes are broader than that.

The push to expand Medicaid was championed by then-Gov. Jan Brewer.

Not long after the Friday ruling she wrote on Twitter that the plan “saved lives, prevented rural hospitals from closing and preserved the Arizona economy.”


Gov. Doug Ducey tweeted, “The Court has spoken and I respect its ruling. The State of Arizona will continue to follow the law passed by the Legislature in 2013.”


If the assessment had been ruled unconstitutional, the state would have been forced to find the necessary funding for the Medicaid expansion or force people off the rolls.

That second decision would mean a loss of federal dollars for the state.

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