25-02-2025
What is Medicaid and how does it work in Arizona? Here's what to know
Arizona's $21 billion Medicaid program is government health insurance that as of February provided coverage to roughly one in every four state residents or 2 million people.
Known as the Arizona Health Care Cost Containment System or AHCCCS (pronounced "access"), the state's Medicaid program has been around since 1982 and reached a record-high enrollment of 2.5 million Arizonans in early 2023.
AHCCCS primarily provides health coverage to low-income people typically living at about 138% or less of the federal poverty level and to people with disabilities, though financial thresholds for various programs vary. An annual income of $21,597 per year for a single person is 138% of the federal poverty level and for a family of three, it's an annual household income of $36,777.
Here are seven things to know about AHCCCS in Arizona.
Any Arizonan covered by AHCCCS is covered by Medicaid because they are the same. Medicaid is the name of the federal program and each state has its own Medicaid program. Arizona's program is known as AHCCCS. Some other states have their own names for their Medicaid programs. For example, California's program is called Medi-Cal, Colorado's is called Health First Colorado, and in the state of Washington, it's called Apple Health.
Medicare is a government health insurance program primarily for people over the age of 65. Some people are known as "dual eligible," meaning they have both Medicare and Medicaid coverage. In Arizona, there are 250,000 dual-eligible people enrolled in both Medicare and AHCCCS, state data shows.
Obamacare, which is the same thing as Affordable Care Act health insurance, is not Medicaid or Medicare. Rather, it is private health insurance that is available on state and federal marketplaces with federal subsidies available to eligible people to help pay for it.
Medicaid was authorized in 1965 when President Lyndon Johnson signed the Medicare and Medicaid Act, also known as the Social Security Amendments of 1965, into law. Yet Arizona's program didn't start until nearly two decades later in 1982, when it began as a two-year pilot.
AHCCCS became an independent agency in 1985 under Arizona Gov. Bruce Babbitt, when enrollment was less than 200,000, which is less than 10% of what it is today.
Enrollment numbers have grown as the state's population increased, and as new categories of coverage have been added to the program.
Among the new categories is the Arizona Long Term Care System or ALTCS in 1988; KidsCare in 1999; childless adults living at or below the federal poverty level in 2001; Medicaid eligibility expansion in 2013 as allowed by the federal Affordable Care Act; and in 2016, the state health department's division of behavioral health services moved to AHCCCS, putting the agency in charge of the state's system of mental health care, including Arizonans who need behavioral-health services but do not qualify for AHCCCS.
As of January, 1.1 million AHCCCS enrollees were adults between the ages of 18 and 64, which works out to 54% of enrollees.
Children from newborn through 17 make up more than one-third of all enrollees in the program, with 764,878 children in that age group enrolled statewide as of January, agency data says.
AHCCCS records indicate the agency's budget in the 2017 fiscal year was anticipated to be approximately $11.4 billion, nearly half of what it is today.
Agency officials say the increase is due to several factors, including caseload growth, health care cost inflation and expanded eligibility criteria for its KidsCare program.
In the 2025 fiscal year budget, roughly three-quarters of the agency's funding comes from the federal government and $2.7 billion comes from Arizona's state general fund. The remaining sources of revenue for the program are hospital assessments, county funding, tobacco tax and tobacco settlement money, prescription drug rebate funding and other smaller sources.
Enrollment generally has grown, but it did fluctuate significantly during the Great Recession when KidsCare was frozen and childless adults lost eligibility. Both were later restored. KidsCare is Arizona's version of the federal Children's Health Insurance Program, known as CHIP.
When KidsCare was frozen and before childless adults were restored to AHCCCS eligibility, the amount of uncompensated care at Arizona hospitals rose, and between 17% and 20% of state residents were uninsured. The rate of uninsured people in Arizona as of 2024 was 8.7%, the U.S. Census Bureau says.
Hundreds of millions of dollars in Medicaid money was fleeced from Arizona taxpayers as part of a scheme that preyed on Indigenous people, according to a massive multiagency fraud investigation that revealed its findings in May 2023.
In fiscal year 2019, the behavioral health outpatient billing code, which was one of the main codes the alleged perpetrators were using, billed $53 million to AHCCCS, Attorney General Kris Mayes said. In 2020, it went up to $132 million; in 2021, up to $291 million; and in 2022, up to $668 million, which is more than 12 times the 2019 amount.
During a news conference announcing the fraud, Mayes called the loss of money a "stunning failure of government."
"I don't think it is too much to say that this is one of the biggest scandals in the history of the state of Arizona when it comes to our government," she said.
Reach health care reporter Stephanie Innes at or at 602-444-8369. Follow her on X, formerly known as Twitter, @stephanieinnes.
This article originally appeared on Arizona Republic: What to know about Medicaid in Arizona, a $20.7 billion program
