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AZ Appeals Court Refuses to Push Legislature to Restore Medicaid Cuts

Saying they won't second-guess lawmakers, the state Court of Appeals on Tuesday refused to order the Legislature to provide more funds to restore cuts to Arizona's Medicaid program.

In a unanimous decision, the judges agreed that when voters approved a ballot measure in 2000 they intended that the Arizona Health Care Cost Containment System provide medical care for anyone below the federal poverty level. And they said the measure was crafted so that if tobacco taxes and lawsuit settlement funds were insufficient, the Legislature was directed to supplement that with other "available sources'' of cash.

But Judge Patricia Norris, writing for the court, pointed out that when lawmakers made the cuts earlier this year they concluded they had used all available sources to fund the program. She said it is legally irrelevant that lawmakers used money for other non-mandatory programs.

"Under our system of governance, and in these circumstances, resolution of this issue is entrusted to the Legislature's judgment,'' Norris wrote. More to the point, she said these are political questions.

"In these circumstances, we are ill-equipped to inquire into and second-guess the complexities of decision-making and priority-setting that go into managing the state's budget,'' she wrote.

Norris stressed that Tuesday's ruling does not mean the court believes that the decision to cut funding complies with what voters directed in approving the ballot measure. She said it simply means that the question is political and therefore beyond the court's powers to review.

That 2000 ballot measure says anyone below the federal poverty level is entitled to free care. That figure, adjusted annually, currently is about $18,500 a year for a family of three.

It also bars the Legislature from imposing a cap on enrollment in AHCCCS.

Medicaid pays about two-thirds of the cost. Proposition 204 said the state's share would be picked up by tobacco taxes, the funds from a settlement with cigarette companies and other "available sources.''

In adopting a budget for the current year, lawmakers left the taxes and settlement funds in place. But they said the budget situation left no "available'' funds, and directed Brewer to scale back AHCCCS to compensate.

She responded with a plan to exclude childless adults and some parents from the program, people who Medicaid does not require states to cover.

About 230,000 in this category already enrolled on July 8, when the change took effect, were allowed to remain in the program as long as they remained eligible. But beginning that day, everyone else in this category was turned away, and those who lost eligibility could not re-enroll.

AHCCCS does not track how many were denied coverage. But the agency admitted earlier this year that the change would affect about 135,000 over the course of a year.

Norris said the outcome might be different had those who crafted the ballot measure spelled out a specific amount that the Legislature had to appropriate each year to fund the program.

At that point, she said, that directive would have been tantamount to the people, acting as legislators, specifically appropriating funds. And, because the Arizona Constitution forbids lawmakers from overturning voter-approved mandates, the Legislature would have had no choice but to comply.

"Although the language of the supplemental funding provision demonstrates the proponents of Proposition 204 wanted the Legislature to allocate monies to provide AHCCCS benefits to all eligible individuals, the required language specifying a 'certain sum' is noticeably absent,'' Norris wrote. By leaving the amount uncertain, she said, the court cannot declare that the Legislature failed to comply with the mandate.