Brewer: Florida ruling bolsters case for Medicaid waiver

"We all know the question of constitutionality in this case has nothing to do with Medicaid," the official said, adding that the administration is working with states to find cost savings in Medicaid.

Vinson, a President Reagan appointee, on Monday became the first judge to strike down the entire reform law. In December, another Republican-appointed judge only struck down the requirement for individuals to purchase insurance by 2014, and two other judges — both President Clinton appointees — have upheld the so-called individual mandate.

However, in his ruling Monday, Vinson specifically upheld a Medicaid provision requiring states to expand the Medicaid program to cover individuals whose incomes are at or below 133 percent of the federal poverty level. With 20 legal challenges launched against the reform law since it was enacted last March, Vinson is the only judge so far to rule on any of the law's Medicaid provisions.

Under the reform law, states stand to lose their Medicaid reimbursement if they toughen eligibility requirements before 2014, when state-run insurance exchanges open.

"With a heavy heart," Brewer asked Health and Human Services Secretary Kathleen Sebelius to allow Arizona to reduce Medicaid eligibility for about 280,000 individuals as the state struggles with a massive budget deficit.

“I am left with no other viable alternative,” Brewer wrote to Sebelius.

Earlier this month, 33 governors and governors-elect, including Brewer, asked President Obama and congressional leaders to remove the so-called "maintenance of effort" Medicaid requirement from the reform law.

Last week, Centers for Medicare and Medicaid Services Administrator Don Berwick said there’s “no simple answer” for solving states’ Medicaid woes. Berwick said the agency is crafting numerous possibilities to help states avoid massive cuts to Medicaid rolls. 

"We will use all the leverage we have in the law to reach out to them with dollars and tech support," Berwick told the Families USA conference last week. "We're here to protect beneficiaries and states."