- Medicaid covers nearly 2 million people in Arizona, including 569,000 who have coverage under Medicaid expansion.
- The Obama administration approved a Medicaid waiver for Arizona, but rejected the most conservative parts of it, including a work requirement.
- The Trump administration approved a work requirement for Medicaid expansion and elimination of retroactive Medicaid coverage.
- Arizona had planned to phase in the work requirement starting in the fall of 2020, but indefinitely postpone implementation amid legal challenges to work requirements in other states.
- The Biden administration officially rescinded approval for the work requirement in mid-2021.
Medicaid expansion in Arizona
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% in 2013 to 10% in 2016. It climbed over the next few years, reaching 11.3% in 2019, but that was in line with the nationwide increase in the uninsured rate under the Trump administration (from 8.6% in 2016 to 9.2% in 2019).
of Federal Poverty Level
Total enrollment in Arizona Medicaid and CHIP as of early 2021 stood at nearly 2 million people.
Arizona’s Medicaid program, called the Arizona Health Care Cost Containment System, or AHCCCS, utilizes private insurers that provide managed care services to Medicaid enrollees. As of 2021, there are eight managed care plans from which AHCCCS members can choose, although plan availability varies by location.
Arizona lawmakers have pushed for changes to Medicaid eligibility and benefits since 2015
In the 2015 legislative session, Arizona lawmakers passed Senate Bill 1092, which made an effort to dial back the state’s expansion of Medicaid. SB1092 requires the state to submit an 1115 waiver request to CMS every year, asking for approval for new Medicaid eligibility guidelines. (H.B.2228, which was enacted in 2018, calls for the exemption of Native Americans from any new Medicaid eligibility rules that are implemented as a result of Arizona’s waiver process; the Trump administration’s approval of Arizona’s Medicaid waiver in 2019 includes an exemption from the new rules for Native Americans, but only if they’re enrolled citizens of their tribes.)
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. In August 2015, Governor Doug Ducey unveiled his proposals for Arizona’s first Medicaid waiver proposal, including a work requirement and the five-year lifetime limit on Medicaid coverage for able-bodied adults. 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 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.
Many advocates for low-income Arizona residents were worried that Ducey’s proposal would be a setback, chipping away at the hard-won gains the state has made in reducing the uninsured rate.
Obama administration approved 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% and 138% 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 (as described below, the Trump administration allowed the state to change this to a mandatory community engagement requirement, but the state opted to indefinitely postpone implementation due to the uncertain legal status of work requirements in other states, and the Biden administration officially rescinded approval for Arizona’s work requirement in June 2021).
The Obama administration CMS declined several provisions of the original waiver proposal, 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.
Trump administration approves Arizona’s work requirement proposal with a 2020 effective date; Arizona indefinitely postponed implementation amid legal uncertainty, and the Biden administration withdrew approval in 2021
The Trump administration clarified in early 2018 that they were open to work requirements, and approved them for several states. In late 2017, Arizona submitted their AHCCCS Works waiver proposal as an amendment to the already-approved waiver the Obama administration had granted in 2016 (an additional amendment, submitted in April 2018, proposed eliminating retroactive coverage).
The proposal was partially approved in January 2019, allowing Arizona to implement the following changes:
- Work requirement (effective no earlier than January 2020): If this requirement had been implemented, Medicaid expansion enrollees between the ages of 19 and 49 would have had to work (or participate in other “qualifying community engagement activities”) at least 80 hours per month, and report their compliance to the state. Non-compliant enrollees — including those who are working but not reporting their work hours to the state — would have had a three-month grace period, after which they would have lost their Medicaid coverage for two months. Exemptions would have applied for various groups, including pregnant women, homeless people, full-time students, victims of domestic violence, and parents caring for minor children.
- In September 2019, Arizona officials announced that the work requirement would not take effect until the fall of 2020, and would initially only be implemented in urban areas of the state (Maricopa, Pima, and Yuma counties), with implementation in some rural areas (Apache, Gila, Graham, Greenlee, La Paz, and Navajo counties) potentially delayed until 2022.
- In October 2019, Arizona officials sent a letter to CMS, notifying the federal government that the state has decided to postpone implementation of the work requirement “until further notice.” The state’s decision to suspend the work requirement was based on “the evolving national landscape concerning Medicaid community engagement programs” and the legal uncertainty these programs are facing in other states. Instead of moving forward with implementation of a program that seems increasingly likely to be judicially overturned, Arizona decided to shelve the idea for the time being.
- In March 2020, the Families First Coronavirus Response Act provided additional federal Medicaid funding to states, but only if they didn’t disenroll anyone from their Medicaid rolls for the duration of the COVID emergency period. That effectively shut down the concept of Medicaid work requirements for the duration of the COVID pandemic.
- In June 2021, the Biden administration notified Arizona that the Medicaid work requirement approval was being withdrawn. So a work requirement will not take effect in Arizona after the COVID public health emergency ends.
- Waiver of retroactive eligibility, meaning that coverage would take effect the month the person applies, instead of taking effect up to three months prior to the month the person applies. The waiver of retroactive eligibility won’t apply to pregnant and postpartum women, or to children under the age of 19.
But the Trump administration did not approve all of Arizona’s proposals. Notably:
- HHS did not approve the state’s proposed five-year limit on Medicaid coverage for expansion enrollees who don’t comply with the work requirement.
- HHS also did not approve the state’s request to have the federal government pay for the bulk of the cost of implementing the work requirement. The federal government pays most of the cost of providing medical care to Medicaid expansion enrollees (93 percent in 2019, dropping to 90 percent in 2020 and future years), and Arizona wanted the federal government to use that same funding rate to help the state cover the cost of setting up the system to administer the work requirement. HHS declined.
Who is eligible for Medicaid in Arizona?
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% of the federal poverty level (FPL)
- Children 1 to 5 years with family income up to 141% of FPL
- Children 6 to 18 with family income up to 133% of FPL
- As of July 2016, children not eligible for Medicaid but with family income up to 200% of FPL are eligible for KidsCare (CHIP)
- 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 (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 took effect as early as September 1, 2016. The state expected 30,000 to 40,000 children to be newly eligible for CHIP.
To check if you qualify for AHCCCS, you can use the Quick Screener on the Health-e-Arizona Plus website. The site houses the online application for medical, food/nutrition, and cash assistance programs, and it connects with the federal health insurance marketplace, HealthCare.gov.
How does Medicaid provide financial assistance to Medicare beneficiaries in Arizona?
Many Medicare beneficiaries receive help through Medicaid with paying for Medicare’s premiums, programs that lower prescription drug costs, and services Medicare doesn’t cover — such as long-term care.
Our guide to financial assistance for Arizona Medicare enrollees explains these benefits, including Medicare Savings Programs, long-term care benefits, Extra Help, and eligibility guidelines for assistance.
How do I enroll in Medicaid in Arizona?
The quickest way to apply for AHCCCS is online at www.healthearizonaplus.gov.
Or you can enroll through healthcare.gov if you are a non-disabled person under age 65.
If you need help completing an application, call 1-855-HEA-PLUS (1-855-432-7587) or search online for a community assister.
Arizona Medicaid history
Arizona was the last state to implement a traditional Medicaid program, establishing AHCCCS in October 1982. 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. About 84% 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.
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.
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) was legal. But in March 2017, the appeals court rejected the lawsuit, ruling that the assessment was legal and that Medicaid expansion could continue.
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.
In September 2016, CMS approved another waiver proposal, but did not agree to some of the state’s requests, including a work requirement and lifetime limit on Medicaid eligibility. The waiver created a new AHCCCS CARE program for enrollees with income above the poverty level, with enrollees required to make modest contributions to a health savings account. There was also a voluntary job search program.
Arizona submitted a new waiver proposal to the Trump administration, which called for a work requirement and a five-year limit on Medicaid eligibility for the Medicaid expansion population if they failed to comply with the work requirement. The Trump administration approved the work requirement (although as noted above, Arizona indefinitely postponed implementation and the work requirement approval was rescinded by the Biden administration), and is allowing Arizona to eliminate retroactive Medicaid coverage for most enrollees. But they rejected the five-year limit on Medicaid expansion coverage, and declined to pay the bulk of the cost for the state to administer the work requirement.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.