Judge set to rule on Arizona's freeze of Medicaid enrollment

A judge will decide in August whether an Arizona law freezing Medicaid enrollment for residents without children is constitutional.

The measure, which took effect July 8, prevents childless adults from enrolling in an assistance program that was part of a state Medicaid coverage expansion. Childless adults who received Medicaid before the July date will be grandfathered in, but future access will be denied if their enrollment is not renewed.

The law is needed to offset a budget shortfall and will save the state about $500 million in the first year, lawmakers said. Opponents argue that the measure will cause nearly 135,000 needy citizens to lose health care coverage in the next year.

The Arizona Center for Law in the Public Interest has filed a lawsuit in the Supreme Court for the State of Arizona against the state on behalf of residents who could be excluded from coverage. The plan violates the state's Constitution and infringes upon the wishes of voters, who in 2000 voted for childless adults to receive Medicaid benefits, said Tim Hogan, ACLPI executive director. "We filed a lawsuit because it's illegal. In Arizona you cannot repeal an initiative. As a matter of constitutional law, we're asserting that they are unable to do this."

In late June, the plaintiffs attempted to block the law before it took effect, but a judge denied the request. The judge said they could not prove "irreparable harm" because no resident had been denied coverage yet.

In a statement, Arizona Gov. Jan Brewer applauded the court for denying the injunction, saying it would have interfered with state Medicaid reforms. "This effort is necessary if the state is to get a handle on state Medicaid spending that has increased 65% in just four years," she said. "That said, I do not revel in this court decision. I recognize that our move to freeze Medicaid enrollment of adults without children will have real-world impacts on real people. But I remain convinced this cost-cutting move is fiscally necessary and will allow the state to maintain its core services."

Hogan plans to request another injunction during an August hearing. By then, he said, he will have added new plaintiffs to the lawsuit who have been denied access to Medicaid.

The federal Centers for Medicare & Medicaid Services has approved Arizona's phase-out plan for Medicaid. However, Cindy Mann, director of the CMS Center for Medicaid, CHIP and Survey & Certification, urged the state in a July 1 letter to consider an approach that would continue to provide financial assistance for vulnerable populations.

"We are concerned about the loss of coverage for low-income adults that will result from Arizona's decision to stop enrolling people into its Medicaid Childless Adult program," CMS said in a statement. "However ... it is the state's choice to renew, modify or terminate" the program.