Honoring military service means caring for the whole family. In Arizona, that commitment includes protecting access to affordable, reliable health coverage through AHCCCS — our state’s Medicaid program, which helps military families get much-needed care without the added stress of high medical fees or out-of-pocket expenses.  

A new report from Georgetown University’s Center for Children and Families (CCF), “Medicaid: Important for Military Families & Future Readiness,” shows how Medicaid helps fill the gaps left by TRICARE, our nation’s military health plan, and ensures active-duty members and veterans — and their families — have access to health coverage and care.    

In Arizona, nearly 8,000 military-connected children call our state home, and many of them depend on AHCCCS to get the care they need to grow and thrive.  

Children make up 40% of all Arizonans who receive health care through AHCCCS, including for doctor visits, immunizations, dental care, and more. This includes military-connected children whose families may still face coverage gaps and high out-of-pocket costs, even with TRICARE. That’s where Medicaid steps in for some families as a secondary payer to bridge those gaps and protect low-income military families from medical expenses they shouldn’t have to shoulder alone.  

When service members are confident their families have access to high-quality, affordable health care, they can focus on their missions with peace of mind. But the deep cuts that Congress is considering will make it harder for many military families to get the care they need and add financial stress for families who already sacrifice so much.   

AHCCCS is more than just a public program. It’s a vital source of security and care for Arizona’s children, veterans, and military families. We must stand together to protect it.

Health care services delivered in schools are an opportunity to meet children where they are and deliver critical health services in a setting where they spend most of their time. School-based health services are especially important in low-income and rural communities where access to health care services is limited or difficult to access.  

The Individuals with Disabilities Education Act (IDEA) ensures that students with a disability are provided with a Free Appropriate Public Education that is tailored to their individual needs. Outside of specific local and state funding efforts to support these needs, the Medicare Catastrophic Coverage Act authorized federal funding to provide medically necessary services to students per their Individualized Education Program (IEP) or Individualized Family Services Plan (IFSP). In 1995, local education agencies (LEAs), also known as school districts, became eligible providers under the Medicaid program to receive reimbursement for services provided in the school setting. With this, school-based Medicaid became a joint federal and state program that funds certain medical and transportation services to eligible students.  

The Medicaid School-Based Claiming Program 

Access to school-based health services is critical to improving health and academic outcomes for students. In Arizona, the Medicaid School-Based Claiming (MSBC) Program is the state’s school-based Medicaid program, where the Arizona Health Care Cost Containment System (AHCCCS) reimburses LEAs for providing medical and transportation services to eligible students. There are three revenue funding streams available within the MSBC Program, which include: 

• Direct Service Claiming (DSC)- where eligible providers log and bill certain Medicaid-covered services for payment 

• Medicaid Administrative Claiming- where reimbursement is included for routine administrative outreach activities within the school setting through a quarterly cost report 

• Annual Cost Settlement- where reimbursement is included for costs associated with the medical and transportation services that are included on an annual cost report that is then reconciled with the DSC paid claims 

In 2014, the Centers for Medicare and Medicaid Services (CMS) issued a letter to State Medicaid Directors addressing the reversal of the long-standing ‘Free Care’ policy. This allowed LEAs the flexibility to claim reimbursement for services beyond those written into an IEP or IFSP. The expansion opportunity serves more Medicaid-enrolled students who have another medical plan of care, where medical necessity has been established. This program expansion opportunity, called ‘Open Care,’ was introduced by AHCCCS in 2021 and increases Medicaid reimbursement for LEAs that participate in the MSBC Program.  

Impact of Medicaid Cuts on Students with Disabilities in Arizona 

Proposed Medicaid cuts pose a significant threat to student health services, particularly affecting students with disabilities. LEAs depend on Medicaid to fund essential services such as nursing, mental health counseling, and specialized therapies. A survey¹ by the Healthy Schools Campaign revealed that: 

• 80% of LEAs anticipate staff reductions in health services 

• 70% expect cuts to mental and behavioral health programs 

• 62% foresee decreased resources for assistive technologies if these cuts proceed  

Such reductions could hinder academic performance and well-being, especially for students with disabilities who rely on these critical supports. 

For Arizona students, these proposed cuts would severely disrupt school-based health services provided under IEPs. In 2023, 51,237 students received Medicaid-covered services, and 85% of Arizona students attend schools enrolled in the MSBC Program.² Critical services at risk include nursing care, such as medication administration, as well as behavioral health support, including therapy, counseling, and psychological testing. A full list of services and provider types eligible for Medicaid reimbursement can be found here. With Medicaid funding essential for these programs, Medicaid cuts would force LEAs to shift resources or eliminate services altogether, threatening student health, academic success, and overall well-being. 

CAA Role and Next Steps 

Children’s Action Alliance (CAA) has continued efforts highlighting the importance of the MSBC Program, specifically with the Open Care expansion, by working with stakeholders and increasing program awareness. Although the program has expanded, CAA has identified a need for greater awareness about the MSBC Program, including how to participate, what types of services are eligible, and that MSBC-participating LEAs can now submit for reimbursement through Open Care. As most Arizona students are attending an LEA that participates, there is still a strong desire for increased participation and utilization throughout the state.  

AHCCCS is also adding additional changes and flexibilities through a State Plan Amendment (SPA) based on 2023 CMS guidance. Although the submission of the SPA is currently delayed following the threats at the federal level, CAA is taking this opportunity to continue to work with AHCCCS, LEAs, billers, and other stakeholders to promote the program and increase program comprehension. As we are unsure of what the changes at the federal level will bring to the MSBC Program, CAA does know that the MSBC Program is important and is a vital funding stream for many LEAs in the state.

CAA acknowledges that potential cuts to Medicaid not only impact the health and well-being of students, but also puts added financial pressure on LEAs.  

 “With Medicaid cuts, the salaries for the current related services staff would then have to be taken out of the general fund, which has a negative ripple effect on all student services.”— Director of Special Education, Arizona 

With the current fight to protect Medicaid, know that Medicaid in schools remains a CAA priority. For more information and to learn how to participate if you are at an LEA that does not currently participate, please click here. 

If you are interested in being a stakeholder and/or would like to find solutions to increase program comprehension, please e-mail CAA’s Director of Early Learning and Education, Kyrstyn Paulat, at kpaulat@azchildren.org  

¹ Health School Campaign. (March 12, 2025) New Report: How Medicaid Cuts Will Harm Students & Schools. https://healthyschoolscampaign.org/blog/report-how-medicaid-cuts-will-harm-students-schools/

² Arizona Health Cost Containment System. (2024) Medicaid School-Based Billing Fact Sheet. https://www.azahcccs.gov/PlansProviders/FeeForServiceHealthPlans/ProgramsAndPopulations/thirdpartyaccounts/SBC.html

Head Start celebrates 60 years this year as a federally funded program that works to provide comprehensive and high-quality early childhood education, health, and nutrition services to low-income children and families. Head Start serves nearly 800,000 children each year and provides significant short- and long-term benefits to the children and families it serves. In Arizona, there are many Head Start and Early Head Start (HS/EHS) Centers across the state, with over 15,000 funded slots for children 0-5.  

HS/EHS plays a critical role in supporting the healthy development of children living in poverty and helping parents seek employment and educational opportunities. HS/EHS ensures that children who are facing obstacles early on in life have the same opportunity as their peers to be ready for kindergarten. This includes those most vulnerable, like young children with disabilities, children experiencing homelessness, children in foster care, and children in families who are living in poverty. HS/EHS has proven that participation improves the likelihood of educational success, including higher high school completion rates, increased college enrollment, and higher college completion rates. It’s called Head Start for a reason! 

Since January, HS/EHS has been severely impacted. First, a federal funding freeze hit providers, then there was a reduction of Head Start federal support staff. In March, the Department of Health and Human Services announced it was cutting a further 10,000 jobs and reorganizing the Administration for Children and Families, which administers HS/EHS. These individuals ensure high-quality HS/EHS services are available to families nationwide and help administer funding. There are now funds being held for HS/EHS centers. In Arizona, that is around $18 million. These rapid changes and uncertainties are creating panic nationwide and forcing devastating closures, putting early care educators and families in difficult situations.

HS/EHS also helps parents with child care, which is essential as there is high demand and limited availability in the country, especially for people living in rural areas. Approximately 46% of all funded HS/EHS slots are in rural congressional districts. Without HS/EHS, many rural communities would have no licensed child care centers. Arizona is already going through a child care crisis, as child care is not affordable for families, and costs now are upwards of $14,000-$15,000 a year for care.  Because there is no sustainable state investment in the Department of Economic Security’s Child Care Assistance Program, there is currently a waiting list of over 4,000 children for families that make 165% or less of the federal poverty line, which can translate to a single mother with one child who makes less than $35,000. Families and children who are in HS/EHS would qualify for the state program, which would mean that around 20,000 young children and thousands of families would be on the waiting list for child care assistance.

As Members of Congress are on recess and in their districts through April 25^th, they will be holding town halls and attending events. With threats of elimination, lack of workforce support, and funding for HS/EHS, Members of Congress must know the benefits of HS/EHS and what underinvestment and elimination of HS/EHS would mean to the state. HS/EHS is represented in eight of the nine congressional districts

HS/EHS has historically had bipartisan support because both parties have come together to prioritize America’s core early learning and care programs. We must continue to support our young children and families who need it the most. We need more investment, not less, in our early care and education systems.   

When moms have quality, affordable health insurance, they can get the support and care they need to be healthy and care for their babies. Medicaid — known as AHCCCS in Arizona — is health insurance that covers a range of maternity care services that support healthy pregnancies, new moms, and thriving babies. More than 80% of pregnancy-related deaths are preventable, and Medicaid is a critical part of preventing these deaths. Medicaid covers prenatal and birth services and screenings, which means moms and babies can get diagnoses and treatment for physical and mental health conditions before they escalate.

In Arizona, one in two births are covered by AHCCCS. However, this critical lifeline is at risk as Congress considers billions of dollars in spending cuts to Medicaid. A new brief from Georgetown University’s Center for Children and Families (CCF), “How Medicaid Supports Maternal and Infant Health,”  explains how Medicaid helps to improve maternal and infant health outcomes:

• Healthier pregnancies and births for new moms. Many of the physical and mental health conditions that lead to maternal deaths — such as infections, hemorrhages, and depression — occur in the first year after pregnancy, and most are treatable. Medicaid ensures that new and expectant moms are connected to life-saving care and treatment when needed.

• Essential support for newborns. Medicaid ensures that newborns get a healthy start in life by covering necessary medical care, vaccinations, and screenings. The program also funds NICU care for babies born preterm or with low birthweight and specialized care for infants and toddlers with developmental delays and disabilities.

• Positive health, education, and economic outcomes for moms and babies. Studies show that Medicaid coverage for moms and children improves health, leads to better education, and increases financial security.

We highlight this issue as Black Maternal Health Week is recognized from April 11-17 to bring attention and action in improving Black maternal health and alarming disparities here in Arizona and in the United States. Learn more from the State of Black Arizona and the March of Dimes about the need for urgent policy solutions. Everyone can play a role in working to prevent pregnancy-related deaths and improve health outcomes for all new moms and babies.

We need our leaders to protect Arizona families, not advance billions of dollars in Medicaid cuts. Congressional cuts to Medicaid would threaten the health of moms and babies and exacerbate our nation’s maternal health crisis.