Healthcare Centers Face Closure Amid Medicaid Funding Cuts

Many Arizona residents are concerned about the future of their healthcare due to a new federal law that threatens to strip coverage from hundreds of thousands of people and could lead to the closure of community health centers and rural clinics.

The "One Big Beautiful Bill Act," signed on July 4, is expected to cut Arizona's Medicaid funding by $34 billion over the next decade. The law introduces stricter rules and work requirements that could leave over 300,000 Arizonans without health insurance.

"The so-called 'Big Beautiful Bill' will devastate Arizona's health system—gutting Medicaid and leaving families without care. Hundreds of thousands of Arizonans will lose their health care, and rural Arizonans are at risk of losing their local health clinics altogether," explained Governor Katie Hobbs.

Healthcare Centers Under Threat

The Arizona Center for Investigative Reporting has stated that 24 community health centers operate nearly 240 locations, serving 870,000 patients. These centers offer a comprehensive range of services, from prenatal care to chronic disease management, for low-income families.

The centers also rely heavily on Medicaid funding. Last year, 43% of their patients had coverage through Arizona's Medicaid program, generating over $700 million in annual revenue. Overall, Medicaid pays for 54% of everything Arizona's clinics do, the fourth-highest rate in the country.

The funding cuts will disproportionately affect rural communities. About 40% of Arizona's health centers are located outside cities, where patients often drive 90 minutes or more for affordable care. Lost revenue could force these centers to reduce hours, lay off staff, cut services, or close completely.

Future Mandates

Beginning December 2026, states must verify Medicaid eligibility twice a year and implement work requirements for adults covered under the Affordable Care Act expansion. While exemptions exist for parents of young children, pregnant women, disabled individuals, children, and seniors, the paperwork requirements may create barriers for eligible people.

Currently, Arizona's Medicaid program covers approximately 2 million people, which accounts for over 25% of the state's residents. Healthcare leaders urge current patients to keep their paperwork up to date and encourage eligible residents to apply for coverage while it's still available.

All Arizona Republican members of Congress supported the law. While no changes have taken effect yet, patients and providers have limited time to prepare for the transition.