Medicaid detour

Foes of expansion eye referendum

Even if voters approve her plan, a threatened citizen referendum on Gov. Jan Brewer’s Medicaid expansion proposal could cast a pall over the 2014 election and throw the Arizona Health Care Cost Containment System into chaos.

If the Legislature passes Medicaid expansion, two former senators and frequent foes of Brewer plan to refer it to the ballot with an all-volunteer effort that would rely on disaffected conservative activists to collect signatures.

Whether the AHCCCS plan survives the ballot is anyone’s guess. In-state business interests and out-of-state conservative groups could spend millions on a campaign that would be viewed by many as a referendum on the Affordable Care Act, more commonly known as Obamacare.

Just referring it to the ballot will be difficult. Organizers must collect 86,405 valid signatures of registered voters in the first 90 days after the Legislature adjourns.

It will be even more difficult if organizers attempt an all-volunteer effort, as former Sens. Frank Antenori and Ron Gould are proposing.

But if Medicaid expansion is referred to the ballot, two things are certain.

One is that Medicaid would become a marquee issue for the 2014 election. The other is that AHCCCS would be thrown into disarray.

AHCCCS in limbo

The state’s agreement with the U.S. Centers for Medicare and Medicaid Services (CMS) expires at the end of 2013, and the feds have strongly indicated that they won’t approve a new one that continues the AHCCCS enrollment freeze for childless adults.

But any law that is sent to the ballot via citizen referendum is barred from going into effect until it’s approved at the next general election. That would leave AHCCCS in a state of limbo, without the ability to reach a new agreement with CMS until after the election.

Unless CMS is willing to temporarily continue the agreement, known as a demonstration waiver, the state would have to make a difficult choice — pay for the continued coverage of the last 63,000 or so childless adults on AHCCCS with state money only, or eliminate coverage for them altogether.

“I think everyone’s aware of the challenges that would be involved in that,” Brewer spokesman Matthew Benson said.

CMS would not say how it would handle the situation if Arizona approved the expansion of Medicaid but was blocked from implementing the new policy, saying it’s too early to comment on the issue. Monica Coury, an assistant director for intergovernmental relations at AHCCCS, said it’s difficult to tell.

“All I know is what they have told us thus far, which is they are not keen on continuing demonstrations that have enrollment freezes like we do,” Coury said.

Covering the last group of childless adults with state-only money through the 2014 election would cost about $300 million.

House Speaker Andy Tobin, R-Paulden, said it would have a significant impact on the general fund. But it’s likely the path the state would take.

“The (Senate) president and I made a commitment to the governor long ago that nobody would fall off,” Tobin said.

Campaign conundrum

Medicaid expansion will undoubtedly be an issue for the Republican lawmakers who vote for Brewer’s plan. Opponents have threatened for months to recruit conservative challengers for anyone who sides with the governor and the Democratic minority.

Some candidates, including Republican gubernatorial hopefuls, haven’t taken a position, which many observers believe would make little difference if the issue is decided more than a year before the primary. But a referendum will make Medicaid a central issue for all state-level candidates in 2014.

“If it gets on the ballot, I think it’s going to be right up there with all your traditional boilerplate stuff — jobs, the economy, education, etc.,” said Chad Willems, a Republican campaign consultant. “I think that everybody who’s thinking about running for governor hopes this is all put to bed in the next couple weeks and is probably dreading a divisive issue like that going into next year.”

A referendum would force everyone to take a position, but there is a lot of disagreement over what impact it would have on the election and who it would help.

GOP lawmakers who vote for expansion will likely already face pressure in their primaries over the issue. Antenori and Gould are hoping it will magnify the issue for them.

“All those guys (who voted for it) now aren’t going to be able to look at this in the rearview mirror, and say that’s water under the bridge. They can’t do that now, because it’s not behind them. It’s going to be in front of them in the primary,” said Antenori, a Tucson Republican.

Willems said a referendum on expansion will likely favor opponents in Republican primaries. In general elections, it will depend on the district, he said, but the issue may favor expansion supporters.

“I think people would be surprised to see there is strong support amongst independents and even primary Republican voters for the expansion,” Willems said.

Medicaid expansion supporters say it will provide a ready-made issue for Democrats to bludgeon their Republican opponents with. Lobbyist and consultant Chuck Coughlin, a longtime Brewer confidante whose firm is lobbying for expansion on behalf of a group of health care clients, has long warned of Democratic gains next November if Republicans fail to expand Medicaid. Coughlin said the same principle will apply if Medicaid is on the ballot because it will drive up Democratic turnout and allow them to reinforce negative perceptions of Republicans, especially if 60,000 or so people get booted off the AHCCCS rolls at the beginning of the year.

“It would absolutely be a disaster for Republicans to have this on the 2014 ballot,” Coughlin said. “The portrayal of Republicans as mean-spirited, cold-hearted and ignoring the will of the Arizona voters are generally not things that win elections.”

GOP consultant Constantin Querard said Medicaid would’ve been an issue in Republican primaries anyway, and a referendum will extend it to the general election. With Medicaid on the ballot, candidates will be asked about it at every forum, town hall and Clean Elections debate, he said.

But Querard believes it would favor anti-expansion candidates. With no presidential or U.S. Senate race on the ballot in Arizona, he said it might also drive up Republican rather than Democratic turnout.

“It’s probably better for Republicans. I would imagine it would be seen largely as a battle over Obamacare rather than Medicaid, and I think that will motivate Republicans more than Democrats,” Querard said. “I don’t see a lot of love out there for Obamacare, but I see a lot of people out there who can’t stand it.”

The long road ahead

Of course, getting expansion on the ballot would be extremely difficult. Organizers would have 90 days to collect 86,405 signatures, which is equal to 5 percent of the total votes cast in the last gubernatorial election. It would be the first referendum by citizens challenging a new law to get on the ballot since 1998.

Political operatives say referendum organizers would realistically have to collect about 120,000 signatures, which some estimated would cost as much $250,000. Others are rumored to be planning referendum drives as well, though it’s unclear who they are or whether they have access to the kind of money that political insiders say they’ll need.

Many expansion supporters say they doubt it will happen.

“You’re assuming a pretty big mountain that they have to climb, and I’m not sure they have the wherewithal to get there,” said lobbyist Jaime Molera, a spokesman for the pro-expansion Restoring Arizona campaign.

Antenori and Gould believe they can get the signatures with volunteers alone. The duo spent the Memorial Day weekend talking to Republican precinct committeemen. Antenori said they already got commitments from 300 PCs, and expects to eventually have about 2,000 on board.

Gould, a Lake Havasu Republican, said Republican precinct committeemen are predominantly opposed to Brewer’s plan and are enthusiastic about helping the effort, dubbed the Unified Republican Alliance of Principled Conservatives.

“Essentially, conservatives feel abandoned. We feel abandoned by the governor and we feel abandoned by Congress,” said Gould, who serves as chairman of the Mohave County Republican Party. “So, I think this will give folks an outlet for their energy.”

Gould said he hopes to get conservative organizations such as FreedomWorks to put their extensive grassroots network to work to help collect signatures. Once they get the signatures, Gould said he expects outside money from conservative organizations to come into the state for the campaign.

Querard agreed, saying he expected funding on both sides of the campaign to be relatively equal.

“I think there’s probably a substantial amount of money out there for the ‘no’ side, not just from Arizona but from outside Arizona,” he said.

However, Willems questioned whether outside groups would put in any significant funding.

“I think a lot of those big players, too, will be really focused on midterm elections,” Willems said.

If expansion goes to the ballot, many of the business and interest groups that have supported the governor would likely contribute to the campaign. Arizona Chamber of Commerce and Industry spokesman Garrick Taylor, whose organization has taken a lead role in the fight for expansion, said he expects the business community to put its money where its mouth is.

“I think there would be a robust campaign out there to support the governor’s plan,” he said.

I’ll see you in court

Gould’s prediction of a court battle may be prophetic.

Shortly after he and Antenori went public with their plans, the Governor’s Office countered by arguing that Medicaid expansion isn’t even subject to a citizen referendum.

Benson cited a 1992 Arizona Court of Appeals case in which the court ruled that a half-cent sales tax increase approved by the Greenlee County Board of Supervisors was not subject to a referendum. The court cited a provision in the Arizona Constitution exempting legislation passed “to provide appropriations for the support and maintenance of the Departments of the State and of State institutions.”

The court ruled that a tax measure is not subject to a referendum because it was passed in support of an appropriation.

“Appropriations are customarily thought of as bills allocating money to state departments and institutions for their operating expenses. Support is a broader term embracing both the acquisition and allocation of funds. Support cannot occur without money,” the ruling read.

Benson said the provisions of the Medicaid expansion plan are intertwined. Arizona must expand coverage to 133 percent of the federal poverty level up from 100 percent in order to get additional federal matching funds that will be used to pay for new patients and preexisting AHCCCS coverage.

“They weighed whether the exemption applies only to appropriations or whether it applied more broadly,” Benson said. “That is the importance of this case, the Court of Appeals finding that there is a broad test that should be employed when it comes to determining whether the exemption is in effect.”

Paul Bender, an Arizona State University law professor and expert on the Arizona Constitution, disagreed with the Governor’s Office’s analysis of the Greenlee County ruling.

Bender noted that the Court of Appeals said a sales tax passed to fund “existing county programs” was not subject to a referendum. Brewer’s plan, however, would create new coverage, in addition to funding preexisting AHCCCS coverage.

Though the hospital tax Brewer wants to implement to pay for the state’s share of expansion wouldn’t be subject to a referendum, Bender said, the actual expansion of AHCCCS coverage would be. Under Arizona’s referendum laws, organizers don’t have to refer an entire piece of legislation to the ballot, and can instead refer only a portion.

Bender said he didn’t think that the entire program would be exempted on the grounds that it would also pay for a preexisting AHCCCS program.

“The new program part of it is clearly referable,” Bender said. “By adding … a tax to a program expansion, you can’t immunize the program expansion from a referendum.”

Some expansion supporters also believe it wouldn’t be subject to a referendum because the policy is part of a budget bill. Appropriations are not subject to the referendum process.

“If it is constructed, as I understand it, as part of the budget process, precedential law is clearly on the governor’s side,” Coughlin said.

Be careful what you wish for

If expansion opponents get their referendum and lose the vote, it may come back to haunt them by making the Medicaid plan voter protected.

The Voter Protection Act, which severely limits lawmakers’ ability to alter voter-approved measures, states that the Legislature “shall not have the power to repeal … a referendum measure decided by a majority of the votes cast.” Voter-approved initiatives and referendums cannot be amended without a three-fourths vote in the Legislature, and then can only be altered in a way that furthers the intent of the voters.

Even if the Voter Protection Act would shield a law approved by citizen referendum, which Gould questioned, the former Lake Havasu City senator said the voter protection didn’t matter, because he doubts the Legislature would ever be willing to repeal such a social welfare program if lawmakers pass it anyway.

“If it gets implemented we’ll be stuck with it for eternity,” Gould said. “I have no problem binding the hands of the Legislature on things. And in reality, they’re never going to undo this anyway.”

While the ultimate goal is to defeat Brewer’s plan, Antenori said just getting Medicaid expansion on the ballot will be a victory, even if the voters approve it, because it will turn up the heat on Republicans who supported Brewer’s plan. But for the two former senators, who frequently clashed with Brewer during their time in the Legislature and often ended up on the wrong side of her veto stamp, there’s an added bonus.

“The other beauty of this is the guys who have got the most vetoes from this governor finally get to veto one of her bills,” Antenori said. “The two record holders for the most vetoes, we get to veto the governor. This doesn’t happen every day. Talk about karma. Karma, karma, karma. She loves vetoing me and Ron Gould’s stuff. This is karma coming back to haunt her. She should have been nicer to me and Ron.”

— Hank Stephenson contributed to this article.