Author: Will Humble

​AHCCCS just turned in their waiver request to the CMS asking permission to implement work reporting requirements and establish a five-year lifetime limit on Medicaid benefits for certain adults.

The proposal aligns with Senate Bill 1092 (enacted in 2015) which requires AHCCCS to annually ask CMS permission to implement a work requirement & 5-year lifetime benefit cap for able bodied adults.

See the Final Submitted Waiver Request

As you might expect – the real key in the waiver is the definition of who is ‘able bodied.’

AHCCCS’ proposal has a long list of categories of adults that are exempted because they’re not considered ‘able bodied.’ More on that in a bit.

Once approved by CMS (which will happen unless they think AHCCCS was too generous with excluding populations), “able-bodied adults” aged 19 to 55 would need to engage in at least 20 hours per week of qualifying activities like a job, school attendance or participation in “Employment Support and Development” programs in order to keep their Medicaid coverage.

There will also be a 5-year lifetime limit for Medicaid enrollment in AZ for “able-bodied adults”. ​

Exempt Populations:

• People who are at least 56 years old;
• Those who qualify for services through the Indian Health Service or Tribally-Operated Health Facilities;
• Native Americans;
• Women up to the end of the 12-month postpartum;
• Former Arizona foster youth up to age 26;
• People determined to have a serious mental illness or who have have a qualifying SMI diagnosis;
• Those in active treatment with respect to a substance use disorder;
• People receiving temporary or permanent long-term disability benefits from a private insurer or the government;
• Individuals who are receiving Supplemental Nutrition Assistance Program, Cash Assistance, or Unemployment Insurance income benefits;
• People who are exempt from ADES’ SNAP Work Requirement programs;
• Individuals who are determined to be medically frail; 
• Individuals who have an acute medical condition (physical and/or behavioral) that would prevent them from following the requirements;
• Full-time high school students who are older than 18 years old;
• Full-time trade school, college, or graduate students;
• Victims of domestic violence; 
• People taking part in AHCCCS Works;
• Individuals who are homeless or who were recently homeless for up to six months post-housing; 
• Individuals who have recently been directly affected by a catastrophic event such as a natural disaster; 
• Parents, caretaker relatives, foster parents, and legal guardians, and caregivers of individuals diagnosed with SMI;
• Caregivers of a family member who is enrolled in the Arizona Long-Term Care System (ALTCS);
• Individuals who were incarcerated within the last six months; or
• Veterans regardless of the discharge status.

Effective implementation will depend on AHCCCS’s ability to cross-reference databases to find exempt individuals, collaborating with agencies like ADES, Social Security etc. for data sharing.

Additionally, it’ll be super important to set up user-friendly systems for “able-bodied” members to report their work, school attendance, or ESD program participation is crucial to prevent unnecessary loss of coverage due to documentation challenges.​

I expect the work program and the 5-year benefit limit for able bodied adults to begin October 1, 2025.

See the Final Submitted Waiver Request

AHCCCS Seeks Public Input on Proposed Medicaid Work Requirements & 5-Year Lifetime Limit on Benefits – AZ Public Health Association

Rounds Consulting and the Arizona Chamber Foundation published a new report last week analyzing and highlighting the economic impact in Arizona if the Congress and the President follow through with their threat to make states pay more of the share of Medicaid costs for the ‘childless adult’ population from 90% to 65%.

ARIZONA POLICY BRIEF: Federal Medicaid Cuts & Arizona’s Economy

Arizona is in a particularly vulnerable position as we’re a “trigger statute” under the Affordable Care Act, meaning if the feds drop their contribution for childless adult coverage below 80% the fees the hospitals pay AHCCCS to pay the state portion for Medicaid coverage for childless adults goes away – and Medicaid coverage for more than 550,000 adults would evaporate.

The report focuses on the economic realities of losing that coverage rather than the public health impact – and the results are profound.

Here’s a summary of the potential impacts:

• Funding Loss: A decrease in the enhanced FMAP rates would lead to a $1.9 billion funding loss for the state, which could double the financial strain that Arizona already faces due to changes in Medicaid funding.
• Medicaid Expansion Discontinuation: If Arizona were to completely end Medicaid coverage for the expansion population, it would result in a significant $7.5 billion reduction in Medicaid spending.
• Impact on Healthcare Providers: As healthcare providers try to compensate for these funding losses, they may shift some of the costs onto private insurers. This would drive up insurance premiums for both businesses and individuals.
• Challenges for Small Businesses: Since many Arizona businesses are small, the rising premiums could push employers to cut back or drop their insurance offerings, creating a cascade of negative economic effects.
• More uninsured individuals will lose access to healthcare coverage.
• Higher uncompensated care costs, as uninsured individuals may still seek medical care, but providers won’t be reimbursed.
• Financial strain on hospitals, which may face more unpaid bills.
• Increased private insurance premiums, further escalating the cost for businesses and individuals.

The economic consequences are severe, with the potential to lose over 36,000 jobs, a contraction of $3.7 billion in economic activity, and a $138 million drop in state tax revenues.

From the Report:

All Arizonans, regardless of their insurance status, would feel the effects of overcrowded emergency rooms, healthcare facility closures, longer wait times for care, fewer medical professionals, a rise in uninsured populations, and increasing health insurance premiums for individuals and employers.

These policy decisions carry significant economic and social consequences. Cuts to Medicaid could destabilize Arizona’s healthcare industry, increase the burden on emergency services, and reduce the overall quality of care for residents.

The healthcare sector, a $38 billion contributor to Arizona’s economy, would suffer greatly, with rural areas facing the most risk due to higher dependence on Medicaid reimbursements. This complex issue could result in long-term damage to both public health and the state’s financial stability.

Perhaps this excerpt from the report says it best:

The primary conclusion from this research is that the economic consequences of federal spending reductions at the scale that are being considered will be significant.

For context, the economic impact on the state of Arizona will fall somewhere between a significant recession and the Great Recession that caused massive fiscal trauma for multiple years.

ARIZONA POLICY BRIEF: Federal Medicaid Cuts & Arizona’s Economy