In the vast landscape of Arizona, the Arizona Health Care Cost Containment System (AHCCCS) provides critical support for more than 2 million residents. Medicaid, which primarily serves low-income individuals, is more than just a health insurance program — it is a lifeline for children, adults with disabilities, elderly citizens and other vulnerable populations. But it also plays a key role in sustaining Arizona’s healthcare infrastructure, workforce and economic vitality.
As federal budget negotiations advance, Arizona businesses — especially those in healthcare, rural markets and workforce development — must recognize what’s at stake.
AHCCCS: A Pillar of Support
AHCCCS is more than just a healthcare program; it is a critical component of Arizona’s social safety net. For children, it ensures access to essential medical services that support their growth and development. For adults with disabilities, it provides the necessary lifesaving care that allows them to live with dignity and independence. Elderly citizens rely on AHCCCS for the medical attention they need to manage chronic conditions and maintain their quality of life.
AHCCCS plays a quiet but essential role in sustaining Arizona’s workforce. When employees or their dependents lose access to care, it can lead to increased absenteeism, reduced productivity and higher turnover — costs that directly affect employers.
Supporting Mental Health
AHCCCS also plays a crucial role in supporting childless adults with serious mental illness (SMI). For individuals like my 30-year-old family member living with schizoaffective disorder, AHCCCS provides access to comprehensive mental health services that are essential for managing his condition. As for many families, the journey with mental illness has been challenging, but AHCCCS has been a constant source of support, offering psychiatric care, counseling, case and medication management and housing support. Without AHCCCS, individuals like my loved one would struggle to afford these vital services, potentially leading to homelessness and a deterioration in mental health and overall well-being involving expensive re-occurring hospitalizations. These outcomes create avoidable strain on emergency services, public resources and employer-supported insurance pools.
The Threat of Federal Budget Cuts
Currently, AHCCCS faces significant threats from proposed federal budget cuts. These cuts could severely reduce its funding, leading to a cascade of negative effects. Reduced funding would mean fewer resources for medical services, increased healthcare costs and a rise in the number of uninsured residents. This is not just a theoretical risk; it is a looming reality that could destabilize the entire healthcare sector and economy in Arizona.
Economic Implications
AHCCCS is a $22-billion program that supports healthcare workers and services across Arizona. Cuts to the program would limit access to care, raise insurance premiums for everyone and threaten the viability of hospitals, especially in rural areas, where closures could create healthcare deserts.
A recent report from the Arizona Chamber Foundation, prepared by Rounds Consulting Group, underscores the widespread impact of proposed Medicaid cuts. For every $1 billion cut, Arizona could lose more than 36,000 jobs, $1.7 billion in labor income, $3.7 billion in economic activity and $138 million in state and local tax revenue. These cuts would not only destabilize the healthcare sector but also have far-reaching impacts on Arizona’s economy, particularly in rural areas and among small businesses, including primary care providers.
Nearly 75% of AHCCCS’s annual funding comes from the federal government. In several rural counties, more than half the population relies on AHCCCS. In a modeled $7.5-billion reduction, the economic fallout could rival the Great Recession, costing up to 300,000 jobs, $14 billion in labor income, and $30 billion in lost output. Up to 500,000 Arizonans — about 30% of AHCCCS enrollees — could lose coverage, causing a surge in uncompensated care.
Moreover, the House’s budget resolution directs the Energy and Commerce Committee to propose $880 billion in Medicaid savings over the next decade. That would force states to cover a much larger share of costs. For Arizona, that means cutting elsewhere, likely in education, infrastructure or public safety.
A Call to Support Vulnerable Arizonans
The potential reduction in AHCCCS funding is not just a healthcare issue; it is a social and economic crisis in the making. Major reductions will destabilize the entire healthcare sector and have sweeping impacts across Arizona’s economy. It is crucial for policymakers and Arizonans to recognize the value of AHCCCS and the essential role it plays in supporting vulnerable populations.
Business leaders must become vocal advocates, not only to protect vulnerable populations but to preserve economic momentum. The health of Arizona’s people is inseparable from the health of its business climate.
We must advocate for the protection of AHCCCS funding to ensure that all Arizonans, especially the most vulnerable, continue to have access to the healthcare services they need. The health and well-being of our community depend on it. We urge policymakers and employers alike to recognize AHCCCS as an investment, not a cost. Protecting this program is essential to Arizona’s economic future.
As concerned Arizonans, we can take action by contacting our state and federal representatives and urging them to oppose cuts to Medicaid and consider the negative impacts of tightening eligibility rules, introducing work requirements and capping federal funding. Let them know that Arizona needs a strong AHCCCS program to protect families, support our healthcare workers and preserve our local economy. You can also join or support advocacy organizations working to defend healthcare access, share your story with local media, and stay informed so you can vote for leaders who prioritize the well-being of our communities.
Tomás León is president of Equality Health Foundation, a nonprofit dedicated to leveling the healthcare playing field in diverse, underserved communities. With more than 20 years in health equity, policy and inclusive leadership, León has led national efforts to eliminate disparities. He continues to champion access to care and health education so all people have the opportunity to live healthier, longer lives.
