WASHINGTON, DC and NEW YORK (April 18, 2017)—A new report estimates that community health centers would face a $48 billion shortfall in total revenues between 2018 and 2022 if Congress moves to repeal some key provisions of the Affordable Care Act (ACA) and separately fails to renew the Health Centers Fund before it is set to expire in September 2017. This report is the first to look at the economic impact on health centers of major changes in federal programs that fund health care for low-income and medically underserved people.
Congress is currently considering options that would significantly reduce federal funding to support the ACA Medicaid expansion for non-elderly low-income adults and that would dramatically scale back premium subsidies for health insurance purchased in the Marketplace. Separately, the Health Centers Fund, also created under the ACA but extended under the Medicaid and CHIP Reauthorization Act of 2015, is set to expire in September 2017 unless Congress takes specific action to extend it.
Researchers at the Geiger Gibson/RCHN Community Health Foundation Research Collaborative, at Milken Institute School of Public Health (Milken Institute SPH), George Washington University, used forecasting models to estimate the losses health centers could face if the ACA Medicaid expansion and premium subsidies for Marketplace plans are eliminated, and if the Health Centers Fund is not extended. Taken together, these losses would cause health centers to lose nearly $48 billion between 2018 and 2022, more than one quarter of the funds they would need to maintain services at the levels supported under the current law.
“Severe cutbacks to funding will force health centers to drastically scale back their services, thereby placing medically underserved urban and rural communities at risk,” said Avi Dor, PhD, Professor of Health Policy and Management at Milken Institute SPH and lead author of the report. “In order to keep clinic doors open, state and local governments would have to shoulder much of the financial burden, which will be extremely challenging, if not impossible in the current fiscal climate.”
The analysis adds to the findings of recent report by the Collaborative, which concluded that a repeal of the ACA Medicaid expansion and Marketplaces subsidies, combined with the non-renewal of the Health Centers Fund, would result in catastrophic funding losses for community health centers–forcing these safety net clinics to cut back on services, lay off staff and shut down clinical sites.
In this analysis, Dor and his team analyzed 2000-2015 data from the Uniform Data System (UDS) and then developed projections to estimate the financial impact of key elements of some current health reform proposals, including funding cuts for Marketplace subsidies, repeal of the Medicaid expansion, and a failure to renew the Health Centers Fund.
To offset the $48 billion shortfall, dramatic increases would be needed in funding from other sources to provide support for health center services, according to the report. Based on historical trends, funding from state and local governments would need to increase by $14.5 billion, while annual appropriations for other federal grants would have to increase by $25.2 billion and private contributions by $8.1 billion in order to offset the loss of revenues from Medicaid, Marketplace plans, and the Health Centers Fund.
“Community health centers are the backbone of the healthcare system for low-income and vulnerable communities and populations,” said RCHN Community Health Foundation President and CEO Feygele Jacobs, whose organization funded the report. “If health centers are forced by potential revenue shortfalls to cut back services or downsize, the impact on health in their communities could be catastrophic.”
Community health centers are the single largest source of primary care for urban and rural communities that experience elevated health risks and a shortage of primary health care. In 2015, 1,375 health centers operating in nearly 9,800 locations served 24.3 million people. That year, health centers cared for 1 in 6 Medicaid beneficiaries.
The report, "Projected Financial Losses Experienced by Community Health Centers under a Scenario of Major Cuts in Key Sources of Federal Funding: 2018-2022” can be accessed here