The Arizona Supreme Court

Capitol Media Services file photo

PHOENIX — The state’s high court agreed Tuesday to decide whether a levy that funds Arizona’s expanded Medicaid program was illegally enacted.

Without comment, the justices said they want to give foes of the levy —current and former state lawmakers — a chance to make the case it’s a tax.

What the court decides will be significant, as it takes a two-thirds vote of both the House and Senate to raise taxes. And since the measure did not get that margin, a finding that the levy actually is a tax would mean the Arizona Health Care Cost Containment System, the state’s Medicaid program, could no longer collect it.

Without the approximately $265 million being collected each year, the state could then no longer afford to provide care to about 400,000 Arizonans who were added to the plan as a result of the 2013 action.

At the heart of the fight is who gets government-provided health coverage.

Prior to 2013, AHCCCS provided care for those below the federal poverty level.

That year, then-Gov. Jan Brewer sought to take advantage of a provision of the Affordable Care Act where Congress agreed to pick up most of the costs for expanding health-care coverage to those making up to 138 percent of the federal poverty level. That is currently about $28,180 a year for a family of three.

To get those federal dollars, however, the state had to restore coverage for childless adults, which had been dropped years earlier in a budget-saving maneuver. And to cover that cost and other state expenses, Brewer proposed — and lawmakers approved — giving AHCCCS Director Tom Betlach authority to impose a charge on hospitals.

The plan was adopted by a simple majority of the House and Senate, with the Republican governor cobbling together a coalition of Democrats and some members of her own party to vote for it.

That led the GOP lawmakers who voted against it to file suit. While they were in the numeric minority, there actually were enough of them to block the levy if it really is a tax and required a two-thirds vote.

No date has been set for the hearing.