Appropriations caucus adopts amendment to freeze new Medicaid expansion enrollments

At a House Appropriations Committee caucus meeting, members discussed and adopted a committee "strike everything" amendment to Senate Bill 14-70 that would freeze new enrollments in Arizona's Medicaid expansion for able-bodied, childless adults and reduce the fiscal year 2026 State General Fund appropriation by about $108 million.

The amendment, adopted in committee, also shifts $75 million from the Hospital Assessment Fund to cover the nonfederal share of the traditional Medicaid program. Committee discussion focused on the amendment's budget impacts and potential effects on people who might qualify under the expansion.

Representative Olsen, the bill sponsor in committee, said the amendment is intended to restrain growth in state spending and to prepare for possible changes in federal Medicaid funding. "This is the amendment that will freeze new enrollments into the Obamacare Medicaid expansion," Olsen said. He told members the change would produce about $108 million in savings to help offset increases in the proposed budgets and argued the freeze is prudent in case federal budget reconciliation reduces the federal match rate.

Olsen described two reasons for the amendment: first, to reduce near-term state spending growth; second, to avoid enrolling people now only to later reduce benefits if federal matching funds decline. He said: "we will be much better off having not enrolled new enrollees ... than should we enroll these new enrollees and then have to take a benefit away from them." He characterized the change as a freeze of future enrollments rather than removing current enrollees from coverage.

Members asked how the amendment would operate and who it would affect. Olsen said the freeze would apply to able-bodied adults of working age who are childless and younger than 65; it would not apply to people who are disabled, have dependents, are younger than 18 or older than 65. He said current enrollees would remain on ACCESS.

A committee member raised the possibility of narrow exemptions, citing people currently undergoing cancer treatment and organ transplant care and offering rough counts discussed in committee: about 23,000 people receiving cancer treatment and roughly 1,700 receiving transplant-related care. Olsen said he was open to further conversations about exemptions but reiterated that any person already enrolled in ACCESS would stay enrolled under the amendment.

Representatives pressed for dollar and eligibility details. Staff told the committee that 133 percent of the federal poverty guideline equals about $20,814 for a single person and about $42,759 for a family of four (HHS federal poverty guidelines multiplied by 133 percent). Staff also said reducing the expansion population from 133 percent to 100 percent of the federal poverty level would generate additional state savings of roughly $40 million, with a substantially larger federal share because of the federal match.

Other members urged attention to oversight concerns. One member referenced the Auditor General's 2023 findings that pointed to fraud risk in the program because of self-attestation and urged that recommended guardrails be implemented alongside any enrollment changes.

No floor or final legislative vote on the bill was recorded in the caucus transcript; the record shows the committee adopted the strike-everything amendment and members discussed possible amendments ahead of further action.

The committee moved on to other bills after the discussion. The freeze would take effect immediately if enacted as an appropriation measure, according to the sponsor's comments in committee.