Is Arizona ready for Medicaid work requirements? What to know

Arizona's Medicaid program, which ​provides health insurance coverage to one in four state residents, is six months away from the largest operational change in the program's history.

The $23 billion state Medicaid program, called the Arizona Health Care Cost Containment System or AHCCCS, pronounced "access," on Jan. 1, 2027, will be tasked with implementing major policy changes that include work requirements and twice-yearly renewals (up from once yearly) for certain enrollees.

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 July 4, 2025.

The law significantly changes 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 and AHCCCS currently covers about 1.8 million state residents.

Enrollees who are part of the AHCCCS adult expansion population will need to ⁠prove they are working at least 80 hours per month or doing another qualifying activity, such as job training or education, to avoid losing coverage.

Several categories of Arizona's Medicaid expansion population will be exempt from the work requirements, such as but not limited to, pregnant and postpartum women, people who are disabled or medically frail (though the government's latest definition of medically frail is controversial), ​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.

Here are five key things to know about the ​upcoming changes, which affect Medicaid programs across the country that expanded their programs under provisions of the federal Affordable Care Act:

Work requirements

Between 400,000 and 500,000 AHCCCS enrollees are part of the adult expansion population that will be affected by HR1's mandatory work requirements and twice annual enrollment renewals. Kids and seniors aren't affected.

Many if not most of those affected people are expected to either be working the necessary hours to meet the requirements, or qualify for one of numerous exemptions to the requirements. ⁠However, the extra red tape of having to prove one is working or exempt twice annually may result in people losing coverage solely due to administrative burden.

For now, AHCCCS enrollees don't need to take action

AHCCCS will provide 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.

For now, there is nothing Arizonans enrolled in the program 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.

Compliance is big technological lift for Arizona

"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," said Meaghan Kramer, ​health policy adviser to Arizona Gov. Katie Hobbs. "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 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.

Implementation of HR1 SNAP changes shaky

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.

States are suing to stop the work requirements

The Centers for Medicare & Medicaid Services recently released a 387-page interim final rule with strict new ​guidelines about Medicaid work requirements that are expected to be more burdensome on AHCCCS enrollees, applicants and on AHCCCS itself.

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.

The new guidelines, for example, do not automatically exempt people with cancer and end-stage renal disease, among other conditions, from the work requirements.

USA TODAY Network via Reuters Connect