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State Lawyer: Arizona's Medicaid Expansion Levy Not A Tax

The lead attorney for the state's Medicaid program wants the Court of Appeals to reject a claim that the program’s expansion in Arizona violates the state constitution.

At issue is how the state is paying its share of the cost of expanding its Medicaid program through a hospital assessment or fee.

In 2013 the Arizona legislature passed the assessment on a simple majority vote because of its “fee” designation.

A group of Republican lawmakers challenging the move say that assessment is actually a tax, which would have required a supermajority vote, meaning its simple majority passage violates the Arizona constitution.

Douglas Northup, lead attorney for the state Medicaid program, says the levy cannot be considered a tax because the legislature did not set the tax rate and the money raised does not go into the general fund.

No date has been set for a hearing.