PHOENIX - Foes of Medicaid expansion in Arizona filed paperwork Wednesday to give voters the last word.

The referendum drive seeks repeal of the provisions of legislation signed Monday by Gov. Jan Brewer to increase the eligibility for free health care to 133 percent of the federal poverty level - 138 percent when adjusted for certain expenses.

Arizona law now covers everyone up to the federal poverty level, about $19,530 for a family of three, though there have been exceptions due to budget problems.

It also seeks to repeal the part of the law that gives the director of the state's Medicaid program the power to levy what amounts to a tax on hospitals to fund Arizona's $240 million share of the expansion bill. The federal government would kick in $1.6 billion if the state goes along.

Backers have to collect 86,405 names before Sept. 12 to put the measure on the 2014 general election ballot.

Just getting enough valid signatures would be a partial victory. That is because a successful petition drive prevents Arizona from implementing Medicaid expansion unless and until voters give their approval. That would kill the anticipated Jan. 1 start date.

It may not get that far.

Jaime Molera, who is heading the Restoring Arizona committee that backs expansion, said attorneys are reviewing the petitions. He says a legal challenge is possible, contending that Medicaid expansion is not subject to referendum and voter veto.

That is based on the contention that the measure - and specifically the hospital levy - funds not only adding 300,000 to the rolls of the state's Medicaid program but also provides the funds necessary to ensure continued coverage beyond the end of the year for 63,000 childless adults. That is because the federal funds to pay for care for these people are contingent on Arizona expanding its eligibility.

Molera pointed out that the Arizona Constitution specifically prohibits public review of laws "for the support and maintenance of the departments of state government and state institutions."

But former state Sen. Frank Antenori, one of the organizers of the referendum, said he is not concerned. He said the language has been reviewed by attorneys and should survive any legal challenge.

If the measure does go to the ballot it will finally put to the test Brewer's contention that the majority of Arizonans support Medicaid expansion.

The expansion is being financed by a key provision of the Affordable Care Act. While better-known provisions include a requirement for individuals to obtain health insurance or pay a penalty, it also provides general financial incentives to states that agree to expand their own Medicaid programs to that 138 percent level.

Brewer said she was a foe of the law, even joining with other states. But once it was enacted - and once the U.S. Supreme Court upheld the key sections - the governor said she had to deal with the fiscal reality.

"Do the math," she said, saying that a $240 million state investment, paid for by hospitals, draws down $1.6 billion in federal dollars. Potentially more significant, Brewer said more people with health insurance means fewer patients showing up at hospitals for care and then being unable to pay.

But Antenori said the whole premise is based on the assumption that the federal government, running a deficit, will live up to its end of the bargain. He predicts a default.

"The state will be forced to try to find the funding to continue this," he said, saying Arizona doesn't have that kind of money. "They're going to bankrupt the state or they're going to raise taxes."

Brewer has touted a "circuit breaker" provision in the law. It says the expanded program goes away automatically if federal funding drops below 80 percent of the cost.

Antenori, however, said he doubts lawmakers will have the political will to suddenly halt care for 300,000 or more Arizonans.

Molera said if a bid to void the referendum fails, his group is prepared to fight it at the ballot. And part of that effort will be to marginalize those who oppose the expansion.

"I just think we need to make our case that this is an extreme minority group," he said. "They're pushed by an extreme agenda that, at the end of the day, I don't think people are going to want to support."

But Tucsonan Christine Bauserman, who is chairing the campaign, said she has had no shortage of people willing to circulate petitions. Many of them, she said, are Republican precinct committeemen who are angered with Brewer for forming an alliance with Democrats, who provided the majority of the votes for Medicaid expansion.

The referendum is only one of the potential hurdles facing Medicaid expansion on Jan. 1.

Attorneys for the Goldwater Institute are exploring a lawsuit of their own. That is based on a constitutional requirement for a two-thirds vote of both the House and Senate for any tax increase or any measure that results in a net increase in state revenues. Medicaid expansion did not get that margin.

"This is an extreme minority group. They're pushed by an extreme agenda that, at the end of the day, I don't think people are going to want to support."

Jaime Molera

who heads the Restoring Arizona committee that backs Medicaid expansion