Group files referendum to block Medicaid expansion

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By Tami Hoey By Tami Hoey

PHOENIX (AP) -- A group opposed to Gov. Jan Brewer's successful legislative push to expand Medicaid under provisions of the federal health care overhaul filed a citizen's referendum to block the new measure Wednesday, just two days after it was signed into law.

The United Republican Alliance of Principled Conservatives led by former state Sens. Frank Antenori and Ron Gould now has until Sept. 11 to gather 86,405 valid signatures. If they succeed the expansion will be blocked until the November 2014 election.

"We really don't have any choice," Gould said Wednesday. "This is the only way we can stop this expansion from happening, since it's come out of the Legislature."

Brewer overcame strong opposition from conservative Republicans in the Legislature by building a coalition of Democrats and some Republicans to push the bill through last week. She signed the law allowing more than 300,000 people to join the state plan on Jan. 1 on Monday.

Medicaid expansion is a key part of President Barack Obama's heath care overhaul law, and Brewer surprised many when she announced in January that she would embrace expansion and ask the Legislature to approve it. She cited a Supreme Court decision upholding the law and Obama's re-election as reasons to act. She also said the law would add thousands of new jobs, provide health care to vulnerable Arizonans and rescue hospitals saddled with millions of dollars in unpaid bills for care they provide to the uninsured.

The plan will cover the state's costs by allowing the director of the state's Medicaid plan, the Arizona Health Care Cost Containment System, or AHCCCS, to levy a new $250 million a year assessment on hospitals. Opponents call that a tax that requires a 2/3 vote in the Legislature. The expansion bill passed through the Legislature without meeting that threshold.

Brewer's staff has said a previous appeals court decision prevents referendums on appropriations and laws, so a court battle could erupt if the group is successful.

"And I expect to be challenged at every possible turn that they can challenge us at," Gould said. "Because the hospitals that claim poverty apparently have a lot of money for political actions."

Brewer spokesman Matthew Benson repeated Wednesday that the governor's office doesn't believe the law can be referred to voters.

"Beyond that you really get into the issue of whether or not this is good for the state of Arizona," Benson said. "This looks to be an effort that will benefit two out-of-work former lawmakers and be a great detriment to the state of Arizona."

Antenori said he expects challenges on whether the law can be referred to voters, on the referendum language and on the signatures when they are filed. Lawyers with the Goldwater Institute, a conservative group opposed to expansion, are prepared to defend the referendum.

"We don't think there should be a challenge, of course, given that the constitution is pretty clear on this," said Christine Sandefur, an attorney for the group. "It's a new tax and an expanded program, so it's definitely referable."

Any legal action to try to block the referendum would be handled by Restoring Arizona, a coalition of hospitals, business groups, the AARP and others supporting Brewer's Medicaid expansion effort.

Restoring Arizona spokesman Jaime Molera said the group's lawyers are looking at whether they can sue to block the referendum now or must wait until all the signatures are gathered, "which we believe is doubtful." Molera also criticized the expansion opponents for filing the referendum.

"For this extreme minority group, very minority and very extreme, to try to usurp what the majority believes and what the Legislature has done is nonsensical," Molera said.

Goldwater is mulling a lawsuit, arguing that the state constitution requires a 2/3 vote to raise taxes. Sandefur said Monday the group may also challenge on a separation of powers argument because the state's Medicaid director is given power to set the assessment and exempt some hospitals. They'll have to wait until the law takes effect in about 85 days to sue.

The group plans to use volunteers to collect signatures, a daunting task during an Arizona summer, but Gould said precinct committee members across the state are incensed and ready to work.

"They're upset at the governor who is a member of our party and they're also upset at the Republicans who crossed the aisle and voted with Democrats to expand Medicaid," Gould said.

Antenori said at least two outside groups have offered to pay for hired petition circulators.