There are many private insurers that I can choose from, but there's only one Medicaid for the poor to choose from. I expect corporations to be amoral, but governments shouldn't be, and needn't be for something that's as much of a blatant Trojan horse as this is.
The extreme right-wing in this country needs scapegoats, and Jan Brewer has found them. In the 1980s it was "strapping young bucks with T-bone steaks", in the 1990s it was "welfare queens," and now it's fat-ass smokers (along with the usual suspects like Mexicans and Muslims.)
Incidentally, I didn't bring up the abortion issue out of the blue -- Arizona just passed a "no abortions based on the race or sex of the child" law, which is another blatant attempt to pass off the real intention of the law (ending abortion) as a humanitarian, egalitarian effort.
You really gotta give it up for these guys for cooking up schemes like this to make these policies seem sensible (provided you don't spend more than 30 seconds looking into them.)