Earlier this month, Client Executive, Chandler Parkinson, had the opportunity to attend the 2025 Arizona State of Reform Health Policy Conference—an event that has become a barometer for what’s next in health care across the state. With stakeholders from across the policy, provider, and payer spectrum, this year’s conference took on an especially urgent tone.
From the surprise resignation of a key Medicaid leader to panel discussions on looming federal cuts, it was clear: Arizona’s healthcare landscape is approaching a moment of profound transformation. Below, we reflect on three moments that captured the energy, concerns, and calls to action that defined the day.
A Keynote Overshadowed by Change: Setting the Stage for Arizona’s Medicaid Crossroads
The conference opened under a cloud of uncertainty. Scheduled keynote speaker Carmen Heredia, Director of AHCCCS (Arizona’s Medicaid agency), resigned just 24 hours before taking the stage, citing political pressure surrounding her confirmation hearing. Her departure cast a long shadow at a critical policy juncture in Arizona.
In Heredia’s place, Meaghan Kramer, Health Policy Advisor to Governor Katie Hobbs, addressed the audience with clarity and resolve. She acknowledged the storm of recent headlines alleging Medicaid fraud in Arizona but swiftly reframed the conversation: Arizona has long been recognized by CMS as a national model for managing fraud, waste, and abuse (FWA).
Importantly, Kramer emphasized that addressing FWA isn’t about slashing budgets with a chainsaw—it’s about investing strategically with a scalpel. She also reminded us that Medicaid’s population isn’t monolithic: of Arizona’s 1.7 million Medicaid enrollees, half are children or seniors. She laid out a stark reality: If federal contributions decline, Arizona does not have the fiscal capacity to backfill the shortfall. Worse still, under current legislation, tens of thousands of Arizonans could lose coverage automatically if the federal match rate drops below 80%. With healthcare as the state’s second-largest economic sector, such losses wouldn’t just impact patients—they could destabilize the broader economy.
Kramer’s keynote set the tone for the rest of the conference: candid, concerned, and deeply focused on protecting access to care amid turbulent policy shifts.
Medicare Advantage: Data, Design, and Political Drift
The first panel Chandler attended dove into the future of Medicare Advantage (MA) in Arizona, offering a nuanced look at how federal policy changes are beginning to reshape the MA market.
MA plans, privately administered but federally funded, are known for offering benefits beyond traditional Medicare—like dental, vision, and fitness programs. However, they also come with design tradeoffs like limited networks and prior authorization hurdles. Special Needs Plans (SNPs), particularly C-SNPs (Chronic Condition SNPs), emerged as a central topic, with one panelist even suggesting they represent “the future” of MA.
Recent federal changes to MA and Part D were a focal point, with panelists emphasizing that these types of midstream reforms—especially those crossing administrations—are exceedingly rare. Among the policy shifts discussed were the exclusion of anti-obesity drugs from coverage and the rising MOOP (maximum out-of-pocket) costs, now $4,900 compared to $4,500, an effort to cover the rising underlying costs.
Though controversial, one panelist noted these moves reflect a process-driven rationale—not necessarily a political agenda. Still, concern lingered that a returning Trump administration might target DEI-linked provisions, including the removal of social determinants of health contribution to RAF (Risk Adjustment Factor) scoring.
Arizona’s penetration rate for MA now stands at 51%, with growth slowing over the past two years—a sign that the once-explosive expansion may be plateauing. As panelists noted, the landscape ahead will likely be defined by targeted enrollment strategies using data and AI, regulatory tension, and pressure on brokers, whose influence the government is now scrutinizing more closely.
Medicaid on the Brink: Fiscal Pressure, Policy Shifts, and Systemwide Risk
Arizona’s Medicaid program, AHCCCS, currently benefits from a ~70% federal match rate. But Congress is now eyeing a package of reforms that trims $880 billion in federal spending over the next decade. While cutting match rates directly appears to be off the table, other levers—like reducing provider tax caps or implementing work requirements—are very much in play.
Provider taxes allow states to raise funds from hospitals and use that revenue to draw down federal matching dollars and offer higher reimbursement rates to providers. Arizona’s hospitals contribute over $1.4 billion annually, which in turn supports nearly $8 billion in Medicaid payments. For example, if the federal government cuts the cap from 6% to 3%, Arizona stands to lose $2.8 billion annually in state and federal Medicaid funding.
Panelists explained that these cuts won’t just affect Medicaid members. Arizona’s health system is integrated, meaning uninsured patients will still require care, and costs will be shifted to private premiums. The burden of covering these gaps will more than likely land on employers and consumers.
Conclusion: What This Means for CITIZ3N
For those of us at CITIZ3N, the conversations at this year’s State of Reform conference weren’t just informative—they were directly relevant to how we anticipate, plan, and adapt in a time of national policy flux.
Our core products—designed to streamline asset verification for state Medicaid agencies—sit squarely at the intersection of the trends discussed. If Medicaid enrollment declines due to reduced federal funding or narrowed eligibility thresholds, we may see lower overall volume and utilization of our tools.
At the same time, discussions around new work requirements and increased frequency of eligibility determinations could have the opposite effect, leading to higher demand for verification services, especially those capable of delivering fast, automated, and compliant decisions. Our position as a trusted vendor gives us an opportunity to support agencies navigating this complexity.
The outlook is mixed. Whether the net impact is growth, contraction, or a volatile blend of both remains uncertain. But one thing is clear: CITIZ3N’s role in helping governments make smarter, more accurate eligibility decisions is more important than ever.
