What to know about coming Arizona Medicaid work requirements
Stephanie Innes interviews Meaghan Kramer at the Arizona state Capitol about the coming Arizona Medicaid work requirements.
Not a day goes by without staff at the Valle del Sol health clinic in Phoenix strategizing about the looming date of Jan. 1, 2027, and what it will mean for their low income patients’ health coverage.
“We will absolutely see a spike in uninsured people. My biggest concern is that people who are eligible will be cut because of the administrative burden,” said Mike Renaud, the CEO of Via del Sol, a federally qualified community health center that sees roughly 15,000 patients per year, half of whom are covered by Medicaid, which in Arizona is called the Arizona Health Care Cost Containment System or AHCCCS, pronounced “access.”
“Medicaid is the largest health insurance program for low income people in the United States. It is the largest payor of mental health services in the U.S.”
Jan. 1, 2027 — six months away — is the deadline for Medicaid programs in 43 states across the country, including Arizona, to implement major policy changes that include work requirements and twice-yearly renewals (up from once yearly) for certain enrollees.
In Arizona, the new rules will mark the largest operational change in the history of the AHCCCS program, said Meaghan Kramer, health policy adviser to Gov. Katie Hobbs.
“This is the fastest they’ve ever had to do something that is operationally complex. And this is the most operationally complex thing they’ve ever had to do,” Kramer said. “We’re straining existing systems that are already old and overburdened on the IT side. And we will need much, much more work on the eligibility side than we have now.”
The changes are a result of HR1, the budget reconciliation bill also known as the One Big Beautiful Bill Act, which President Donald Trump signed into law on July 4, 2025.
The law significantly changes both eligibility and financing of Medicaid, which is a government health insurance program primarily for low-income people that has been in place since 1965. Arizona has had a Medicaid program since 1982.
Having only 18 months to prepare for HR1 is an extremely heavy technological lift for states, including Arizona. Arizona’s aggressive implementation of HR1 changes to SNAP, the Supplemental Nutrition Assistance Program once known as food stamps, resulted in the highest rate of loss of SNAP recipients in the country, with about 450,000 dropping from the program from February 2025 to mid-2026.
Recipients and would-be recipients have told The Arizona Republic SNAP benefits are harder to get than ever, with long hold times on the phone and at satellite offices, a dysfunctional website and fewer DES employees to help them.
The new state budget that was recently signed includes a little more than $10 million that will go to technology and to employees who will be handling the increased workload, Kramer said.
Hopefully state officials have learned from the experience with SNAP and “don’t make the same mistake again,” said Will Humble, executive director of the Arizona Public Health Association.
“The computer system needs to improve and the staff needs to be trained,” Humble said. “I’m convinced the majority of people who lose coverage will lose it because of administrative reasons.”
Further complicating the implementation is that the Centers for Medicare & Medicaid Services recently released a 387-page interim final rule with strict new guidelines about Medicaid work requirements. The new guidelines, for example, do not automatically exempt people with cancer and end-stage renal disease, among other conditions, from the work requirements.
“It is written in a way that makes it clear this is going to be a much more challenging task than any state anticipated,” Kramer said of the guidelines. “States are really struggling with what this new guidance means…The new guidance is going to be much more burdensome on the member, the applicant and the Medicaid agency long-term.”
Twenty-four attorneys general, including Arizona Attorney General Kris Mayes, and two governors on June 30 sued the federal government over the document, arguing that it illegally narrows congressional protections of medically frail people enrolled in the program.
AHCCCS as of June 1 provided health insurance to approximately 1.8 million Arizonans, which works out to one in four state residents. About one in four of those AHCCCS enrollees or 400,000 and 500,000 people, are expected to be part of the adult expansion population affected by the work requirements and twice-annual renewals.
At Valle del Sol, Renaud said clinicians and other staff are already educating patients and clearing up misinformation.
“We want to make sure they understand this is not a Medicaid cut. It is increased barriers to maintaining coverage.”
Here are seven things to know about the coming changes to Medicaid in Arizona:
Outreach to AHCCCS enrollees begins in September
AHCCCS will be providing communications to impacted enrollees by Sept. 1. Most enrollees probably don’t know whether they are part of the affected adult expansion population and that’s part of the outreach. People covered by AHCCCS can expect to see communications via mail, text and email.
“The goal will be to make sure we are providing reliable information to everybody to reassure folks that they should continue to fill out paperwork when they are prompted by their health plan or by AHCCCS,” Kramer said.
For now, there is nothing Arizonans need to do, AHCCCS officials say, except to keep their contact information current on Health-e-Arizona Plus; respond if AHCCCS or your health plan reaches out to you; and watch for official updates from AHCCCS, not third parties.
The changes won’t hit all affected enrollees at once
Annual AHCCCS renewals (also known as redeterminations) happen on a rolling basis, and that’s how the twice-annual renewals and work requirements will be handled, too, Kramer said.
“If they were redetermined last Jan. 1 they will get redetermined again the next Jan. 1. And then beginning that year they are getting redetermined every six months,” she said.
The work requirements allow for volunteer work and school
Enrollees who are part of the adult expansion population will need to prove they are working at least 80 hours per month or doing another qualifying activity, like job training or education, to avoid losing coverage.
It’s unclear how enrollees prove they are working, volunteering
State officials are able to verify through pay stubs that some people are already meeting the work requirements, but not for everyone. And at some point “self-attestation” − simply saying you are volunteering or in school − won’t be enough.
“What we know is the rules are more aggressive beginning in year two (2028) and there will be some allowance for self-attestations in the first year,” Kramer said.
“But after the first year, beginning Jan. 1, 2028, self-attestations are only permitted once in a continuous eligibility cycle. So that would place an enormous burden on AHCCCS and DES (the Arizona Department of Economic Security), which plays a large role in Medicaid eligibility determinations.”
Kids, seniors and Native populations won’t be affected
Several categories of Arizona’s Medicaid expansion populations will be exempt from the work requirements, such as but not limited to, pregnant and postpartum women, people who are disabled or medically frail, parents and caretakers of children under 14, caregivers of someone with a disability, American Indians and Alaska Natives, and those already meeting similar requirements under SNAP.
Kramer said that state officials are working to determine on their end who is exempt from the requirements in order to lessen the burden on enrollees.
Arizona will be offering short-term hardship exceptions to the work requirements for people who have recently been hospitalized, who need to travel outside of their community for medical care, who live in a county with high unemployment rates, or who live in a community where a national emergency or disaster has recently been declared, Cordoba, the AHCCCS spokesperson, wrote in an email.
Technology could be a problem in Arizona
AHCCCS relies primarily on two major systems to administer eligibility and benefits and both are old.
PMMIS, the agency’s core Medicaid administration system, was originally implemented in 1991 and is currently undergoing modernization, with the updated platform scheduled to go live in October 2027, Cordoba wrote. HEAplus, Arizona’s eligibility system, was implemented in 2013.
“While both systems have undergone significant upgrades and enhancements over time to support changing federal and state requirements, the PMMIS modernization project will not be complete before the federal requirements in H.R. 1 take effect,” Cordoba wrote.
Health entities are trying to prevent AHCCCS coverage losses
Hospitals, community health centers and health plans already connect people to benefits, including AHCCCS. One of the key goals of those entities statewide is to ensure enrollment specialists are all trained on how to interact with the technology that’s going to be used to implement HR1, Kramer said.
All those entities have an interest in keeping people insured. Without health insurance, people tend to wait until their health problems reach a critical point before seeking care, which can cause personal medical debt, bad debt for hospitals, and increased health costs across the board.
The Health System Alliance of Arizona, which includes major Arizona health systems such as Banner Health and HonorHealth is “extremely concerned about eligible individuals losing Medicaid coverage due to the increased renewals and work requirements passed in HR1,” Brittney Kauffmann, alliance CEO wrote in an email.
“Our systems are assessing all options to ensure Medicaid members are aware of these changes.”
Reach health-care reporter Stephanie Innes at stephanie.innes@usatodayco.com or follow her on X: @stephanieinnes or on Bluesky: @stephanieinnes.bsky.social.
