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Arizona and the ACA’s Medicaid expansion

Expansion survives challenges on the state and federal level

arizona Medicaid guide

Arizona accepted federal funding for Medicaid expansion under the leadership of former Governor, Jan Brewer, a Republican. Largely as a result of Medicaid expansion, the state’s uninsured rate dropped from 17.1 percent in 2013 to 10.8 percent in 2015.

But there are hundreds of thousands of Arizona residents who are eligible for Medicaid but not yet enrolled. According to a 2016 Kaiser Family Foundation report, there are still 773,000 uninsured residents in Arizona, and 42 percent of them are eligible for Medicaid.

Medicaid expansion continues in Arizona — safe on both federal and state fronts

The election of Donald Trump to the Presidency, and the retained Republican majorities in the U.S. Congress, cast a cloud of uncertainty over the future of the ACA. But on March 24, GOP leadership withdrew their American Health Care Act (AHCA), which had been the first step in their plans to repeal and replace the ACA. House Speaker Paul Ryan noted that “Obamacare is the law of the land” and that it will remain in place “for the foreseeable future.”

The AHCA, which is no longer on the table, would have frozen enhanced federal matching for Medicaid expansion enrollment after 2019, and would have cut federal overall federal funding for Medicaid by converting the program to a per-capita allotment (with options for block grants for some populations) instead of the current open-ended federal match.

Medicaid expansion in Arizona was also facing a renewed challenge within the state. On February 14, 2017, the Arizona Court of Appeals heard a case, brought by Republican lawmakers, challenging whether the state’s assessment on hospitals ($265 million a year, used to fund the state’s portion of Medicaid expansion costs) is legal. But in mid-March, the appeals court rejected the lawsuit, ruling the the assessment is legal and that Medicaid expansion can continue.

The issue, which had been ongoing for years, revolved around whether the levy is a tax or simply an assessment to fund a specific program. New taxes require a two-thirds majority in the state legislature, which the assessment did not receive (it passed with just a simple majority). But Arizona’s Medicaid program argued that the levy is not a tax, but rather an assessment, and didn’t need the approval of two-thirds of the state’s lawmakers.

The lawsuit challenging the hospital levy was brought by the Goldwater Institute (a conservative organization) and 36 Republican lawmakers who had voted against the levy to fund Medicaid expansion. The case was initially dismissed, and the dismissal was appealed to the Arizona Supreme Court. The court ruled in December 2014 that the challenge could proceed.

In a victory for Medicaid expansion advocates, a judge ruled in May 2015 that patients with Arizona Medicaid coverage would be allowed to take part in the lawsuit in defense of Medicaid expansion. The lawmakers who brought the suit had argued that patients shouldn’t have a voice in the case. And in August 2015, a Maricopa County Superior Court Judge sided with Medicaid expansion advocates, ruling that the hospital fee to fund Medicaid expansion is an assessment, rather than a tax.

Brewer did not run for re-election in 2014 due to a term limit, and new Gov. Doug Ducey, a Republican, prominently featured his opposition to the Affordable Care Act (ACA) in campaign literature. He appointed Christina Corieri as his policy advisor for health and human services issues. Immediately prior to her appointment, Corieri was with the Goldwater Institute, which is the organization that filed the challenge against Medicaid expansion.

Ducey’s office was tasked with defending the legality of the hospital assessment, but there were concerns that the defense could be less-than-vigorous. The defense also included an attorney representing Arizona residents who would lose coverage if the state were to pull the plug on Medicaid expansion. Ultimately, the defense succeeded, and Medicaid expansion in Arizona will continue. The federal government is paying 95 percent of the cost in 2017 through 2019, and will pay 90 percent of the cost after that.

If Medicaid expansion in Arizona had unraveled — either as a result of the challenge to the hospital assessment, or because of ACA repeal under the Trump Administration — there are roughly 400,000 people in the state who would have lost coverage. Instead, their coverage continues uninterrupted, and additional people who become eligible for expanded Medicaid can continue to enroll.

Who qualifies for AHCCS?

Arizona has taken a somewhat unique approach to income limitations for covered Medicaid populations. While many states cover children at much higher income level than adults, Arizona has established income limits that are relatively consistent across covered groups.

The Medicaid program in Arizona is called the Arizona Health Care Cost Containment System (AHCCCS, which is pronounced “access”). AHCCCS is available to:

  • Children birth to 1 year with family income up to 147 percent of the federal poverty level (FPL)
  • Children 1 to 5 years with family income up to 141 percent of FPL
  • Children 6 to 18 with family income up to 133 percent of FPL
  • As of July 2016, children not eligible for Medicaid but with family income up to 200 percent of FPL are eligible for KidsCare (CHIP)
  • Pregnant women with family income up to 156 percent of FPL
  • Parents with family income up to 138 percent of FPL
  • Childless, non-elderly adults with family income up to 138 percent of FPL (Medicaid expansion population)
  • Elderly and disabled individuals who have special requirements and meet certain income limits

Arizona froze enrollment in KidsCare—its version of the Children’s Health Insurance Program— in 2010, and discontinued KidsCare at the end of January 2014 due to lack of funding. For more than two years, Arizona was the only state that didn’t have CHIP. But in July 2016, CMS approved Arizona’s proposal to re-open CHIP. Enrollment began July 26, and coverage will take effect as early as September 1, 2016. The state expects 30,000 to 40,000 children to be newly-eligible for CHIP.

To check if you qualify for AHCCS, you can use the Quick Screener on the Health-e-Arizona Plus website. The site houses the on-line application for medical, food/nutrition, and cash assistance programs, and it connects with the federal health insurance marketplace,

How to apply for Medicaid

The quickest way to apply for AHCCS is online at

Or you can enroll through

You can also print an Application for Benefits form, complete it, and submit it by mail (to P.O. Box 19009, Phoenix AZ 85005) or in person. Use the locator tool to find a nearby office.

If you need help completing an application, call 1-855-HEA-PLUS (1-855-432-7587) or search online for a community assistor.

Arizona lawmakers push for changes to Medicaid eligibility and benefits

In the 2015 legislative session, Arizona lawmakers passed Senate Bill 1092, which makes an effort – at least symbolically – to dial back the state’s expansion of Medicaid. SB1092 requires the state to submit a 1115 waiver request to CMS every year, asking for approval for new Medicaid eligibility guidelines.

Lawmakers wanted the new eligibility rules to include a five-year limit on Medicaid coverage for able-bodied adults, along with a provision requiring enrollees to be working or involved in job training or school. Under the Obama Administration, work requirements were a non-starter for Medicaid waiver proposals. But a Trump Administration CMS might be more willing to consider them in future years.

In August 2015, Ducey unveiled his proposals for Arizona’s first Medicaid waiver proposal, including the five-year lifetime limit on Medicaid coverage for able-bodied adults. Ducey’s waiver proposal also included a requirement that enrollees pay increased premiums and cost sharing and establish health savings accounts, and participate in various wellness programs like flu shots and glucose screening.

In order to be able to access their health savings accounts under Ducey’s proposal, able-bodied adults would either have to be working, in school, or actively involved in a job search or job training program. The idea was that Medicaid would remain a solid safety net for children and disabled adults, but that it would become a more temporary program for able-bodied

There is widespread support for the idea of modernizing AHCCCS, but many advocates for low-income Arizona residents were worried that Ducey’s proposal would simply serve to as a setback, chipping away at the hard-won gains the state has made in reducing the uninsured rate.

CMS approves Arizona’s new Medicaid waiver, but with several provisions removed

The state continued to work with CMS to come to an agreement on a new waiver, and in July 2016, Arizona published a revised version of their proposed Medicaid modernization waiver. In September 2016, CMS approved Arizona’s waiver proposal, but eliminated the most conservative aspects of it. The new waiver runs for five years, through September 2021, and includes the following provisions:

  • A new AHCCCS CARE program for enrollees with income above the poverty level (between 100 percent and 138 percent of the poverty level, as those individuals are eligible for Medicaid under the ACA’s expansion). The program requires modest contributions to a health savings account, but the premiums can be deferred for six months if members complete various wellness and preventive care requirements.
  • A job search program that’s offered but not mandatory.

CMS declined several provisions of the original waiver, including the five-year limit on AHCCCS benefits for able-bodied adults, and the work/job search requirement (it was changed to a program in which beneficiaries are automatically enrolled, but AHCCCS benefits are not eliminated for those who don’t actively participate).

CMS also refused to allow Arizona to charge premiums for beneficiaries with income under the poverty level, lock people out of re-enrolling in Medicaid for six months if they don’t pay their premium contributions to the health savings account, or charge fees for missed medical appointments.

All of the details about Arizona’s 1115 waiver proposal and the response from CMS are available here.

History of Medicaid in Arizona

Arizona was the last state to implement a Medicaid program, establishing AHCCCS in October 1982.

Medicaid expansion under the Affordable Care Act was signed into law in Arizona in July 2013. Arizona was one of the first states led by a Republican governor to sign on to expansion.

AHCCCS enrollment has grown from about 144,000 individuals in 1985 to about 1.6 million as of October 2014. By October 2016, there were 1,735,807 people enrolled in AHCCCS. From late 2013 (just before Medicaid expansion took effect) to October 2016, total enrollment in Arizona’s Medicaid program grew by 534,037 people – a 44 percent increase.

Arizona’s Medicaid program has operated for more than 25 years under a Section 1115 waiver that allows the state to use capitated managed care. More than 85 percent of Arizona’s Medicaid beneficiaries receive services through managed care arrangements. Medicaid managed care helps states provide access to health care providers, improve quality of care, and control financial risk.

In December 2014, CMS approved a new 1115 waiver for Arizona’s Medicaid program, although they declined to approve some aspects of the proposal, including a proposed $200 fee for non-emergency use of an emergency room for Medicaid enrollees with income above the poverty level.

Arizona Medicaid

How to apply

Apply online at; submit an Application for Benefits by mail (to P.O. Box 19009, Phoenix AZ 85005) or in person; or call 1-855-432-7587 for help applying, or search online for a community assistor.

Who is eligible

Children 0-1 with family income up to 147% of FPL; age 1-5 with income up to 141% of FPL; 6-18 with income up to 138% of FPL; pregnant women with family income up to 156% of FPL; parents with family income up to 138% of FPL; childless, non-elderly adults with family income up to 138% of FPL; elderly and disabled individuals who have special requirements and meet certain income limits.

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