Health care executives from across the state joined Democratic Gov. Katie Hobbs to call on the state’s congressional delegation to reject Medicaid cuts included in a federal tax cut and spending plan backed by President Donald Trump.
The GOP plan would save around $700 billion by implementing new work requirements for able-bodied adults and other rules, including requiring users to re-enroll every six months instead of once per year.
The bill would also result in at least 8.6 million people losing coverage over a decade, according to an analysis by the nonpartisan Congressional Budget Office.
Hobbs, who said her vote to expand Medicaid in 2013 while serving as a state senator was her “most consequential” act as a lawmaker, said her office estimates that the budget, as passed by the U.S. House, could result in as many as 200,000 of the 1.8 million Arizonans enrolled in Medicaid losing care.
“I'm honestly having flashbacks to when we did Medicaid expansion, and we heard these stories about how much it would help folks across the state, how hospitals were threatened with closure because of uncompensated care, and it's really frustrating being back in that place,” Hobbs said.
Hobbs later quoted former Republican Gov. Jan Brewer, who championed Arizona’s Medicaid expansion.
“You can’t kill people to balance your budget,” Brewer told 12News earlier this year.
The governor convened a roundtable to discuss the potential impacts of the bill, featuring executives from a host of healthcare systems, from Arizona’s largest hospital chain to smaller networks serving the state’s rural populations.
They said the proposed Medicaid cutbacks would have a significant impact on hospitals serving rural and low-income communities that are home to a disproportionate number of Medicaid enrollees.
“I'm not sure how many rural hospitals in Arizona could survive the kind of hit that we're talking about,” said Northern Arizona Healthcare CEO Dave Cheney.
At the very least, those hospitals and health care systems will have to reduce the services available to their communities to account for the loss of a chunk of their Medicaid funding.
Jonathan Leonard, CEO of Yuma’s Sunset Community Health Center CEO, said about 66% of his patients are on Medicaid. Under the House budget bill, it would have to reduce the use of mobile units it uses to care for farmworkers by about 40%, he said.
Reducing services means residents in Arizona’s far-flung rural communities may have to travel hours to receive care if hospitals and medical centers closer to home are shuttered.
“People would lose access to care, forcing them to travel hundreds of miles to get to the next closest care,” said C.J. Hansen, CEO of Canyonlands Healthcare, which has locations in rural communities throughout the state.
And Arizona’s larger health care systems wouldn’t be immune from the cuts, their leaders said.
HonorHealth CEO Todd LaPorte said the proposed cuts could cost his hospitals about $600 million annually, which “would completely wipe out our bottom line.” HonorHealth brought in about $2.94 billion in revenue versus $2.77 billion in expenses in 2023, according to its tax filings.
He said those cuts wouldn’t just impact Medicaid patients.
“Programs are going to have to be rescaled, and that's going to impact privately insured patients just as much as Medicaid patients,” LaPorte said.
Banner Health, the state’s largest private employer, would face a similar situation, CEO Amy Perry said, suggesting the cuts could affect everything from staffing to its training programs for doctors and nurses. Banner Health brought in around $9.48 billion in 2023 versus $8.67 billion in expenses, according to its tax forms.
“Most of our organizations, including Banner, have a 2% margin, so we're talking two cents on the dollar,” Perry said. “There's not a lot of extra to go around, so minor cuts have major consequences.
The Republicans backing what Trump calls the “Big Beautiful Bill” have argued the changes to Medicaid are simply designed to combat “waste, fraud and abuse” by instituting common-sense work requirements and ensuring people aren’t taking advantage of the program.
“It also strengthens and protects Medicaid for those who rely on it by tackling waste, fraud, and abuse through sensible work requirements and stronger eligibility verification,” Republican Congressman Juan Ciscomani said in a statement after he voted in favor of the bill.
But critics have argued that it's the new administrative red tape — not the work requirements themselves — that will result in people losing health coverage.
Hobbs said Arizona is already in the process of adopting work requirements for people enrolled in the Arizona Healthcare Cost Containment System, or AHCCCS, the state’s Medicaid program.
“The difference between the plan we submitted, and what was passed in the House Bill, is the level of flexibility,” Hobbs said.
She argued that more stringent requirements would actually result in more costs, not savings, pointing to work requirements adopted in Arkansas and Georgia. ProPublica reported that implementing new work requirements in Georgia cost taxpayers nearly $87 million, much of which went to consultants.
“The amount of administrative burden that these additional work requirements place on the programs, not just the patients, but the costs are extraordinary and won't actually, at the end of the day, end up saving a lot of money,” Hobbs said.
Dr. Brianna Hillier, director of dental services at Chiricahua Community Health Services, said the bill could also increase costs by reducing rural residents’ access to preventative care and early interventions.
“The mother cannot get her child's asthma medication, that could be as easy as an inhaler,” Hillier said. “The farmer doesn't get his vaccine. The mother, who has to deliver a baby, has to get some form of transportation to get her three hours into the bigger city where there is a hospital to deliver her baby.”
She said limiting preventative care results in an increase in more costly alternatives, like emergency room visits.
Trump’s budget bill passed the U.S. House earlier this month by one vote, but it must still pass the U.S. Senate. It could then get sent back to the House for further votes if the Senate makes expected changes to the legislation — a process that could stretch into July.
Arizona’s Democratic Congressional delegation is opposed to the budget package. Hobbs said her office has been in contact with Arizona’s Republican delegation, though she admitted she has only spoken personally with Ciscomani.
