$569 million. That’s how much revenue community health centers will miss out on because their state legislators decided not to expand Medicaid eligibility. The loss means that many community health centers will continue to struggle to serve all those in need, others will have to cut back on services and some could be forced to shut down altogether.
“In some ways, it’s status quo,” Peter Shin told me. “But for many of them, it’s a bleak status quo.”
Shin co-authored a recent report on the impact of the Affordable Care Act (ACA) on uninsured patients at community health centers, zeroing in on the contrast between states that did expand Medicaid eligibility and those that didn’t. (Quick background: While the health reform law originally required all states to expand Medicaid, with the federal government picking up the majority of the tab, the Supreme Court ruled that states could opt out of expansion and not get penalized.) The report, which was released May 9, found that because policymakers in 24 states have not accepted the Medicaid expansion, 1.1 million community health center patients will remain without health insurance, with patients living the South feeling the greatest impact. Because the new coverage system was created with an assumption that all states would expand Medicaid eligibility, those 1.1 million people now fall into the ACA’s coverage gap — in other words, their incomes don’t qualify them for Medicaid or for subsidies in the new insurance marketplace.
Among health center patients who will lose out on Medicaid coverage, 71 percent live in the South, which was already home to some of the country’s highest uninsurance rates and is still home to some of the biggest health disparities. And 35 percent of the 1.1 million live in just five states: Alabama, Florida, Georgia, Louisiana and Mississippi. Compare that to health centers in states that did expand Medicaid — those centers will realize more than $2.1 billion in additional revenue, which can then go toward expanding service capacity, building new locations and reaching more of a community’s most vulnerable residents. The eligibility expansion is also predicted to insure an additional 2.9 million community health center patients, the report found.
The 544 community health centers located in states without expanded Medicaid cared for 7.6 million patients in 2012, of whom a little less than 3.2 million were uninsured, found Shin and co-authors Jessica Sharac and Sara Rosenbaum. Compared to 2011, those numbers represent an increase of about 250,000 patients, of whom more than 106,000 had no health insurance. The report estimates that about 72 percent of uninsured patients living in states that opted out would have gained coverage under expanded Medicaid eligibility. Citing previous research that suggests a link between Medicaid expansion, better health outcomes, lower mortality and more cost savings, the authors wrote:
In effect, the uninsured patients who would have been eligible under health reform will continue to forgo or delay care and remain at increased risk for more costly health problems that could have been prevented or treated earlier. …Numerous studies indicate that expansion and the infusion of federal Medicaid funding generates net economic and cost-savings gains. However, the decision to opt out of the Medicaid expansion ensures greater spending on uncompensated care and lower federal payments compared to those received in expansion states. In 14 opt-out states alone, uncompensated care costs are expected to increase by $1 billion and $8.4 billion less in federal funding will be received.
Shin, an associate professor in the Department of Health Policy at the George Washington University Milken Institute School of Public Health and director of research at the RCHN Community Health Foundation, said that even though community health centers will financially benefit from rising numbers of people with insurance, it won’t be enough to fill the revenue gap in Medicaid opt-out states. In fact, according to a new fact sheet from the National Association of Community Health Centers (NACHC), about 40 percent of currently uninsured patients will remain without insurance.
And while some might assume that demand for community health center services would go down in the age of health reform, the opposite is true — demand is rising. The NACHC fact sheet cites a study on Massachusetts, where in 2006, when the state implemented health reform, centers were caring for 22 percent of all uninsured residents. In 2009, that number was up to 38 percent. Initially, Shin told me, some newly insured patients might seek out other doctors, but they’re likely to return to the community health center — the place they know and trust.
“Health centers in low-income states are sort of seen as the providers of last resort, but in a lot of communities, they’re really the only ones that are accessible,” said Shin.
On top of Medicaid losses, community health centers are also facing funding problems, Shin noted. The ACA originally authorized an $11 billion trust to support community health center expansion and it was intended as an additional pot of money. However, it’s increasingly being used to backfill severe cuts in the federal budget. All that points to a “lot of uncertainty about whether (centers) can build up or have to hunker down,” he said. Shin also added that centers in Medicaid expansion states will have the opportunity to tackle broader public health issues, while those in opt-out states are “really just trying to maintain.”
According to NACHC, community health centers’ unique approach to patient-centered and preventive care generates $24 billion in yearly savings to the health care system. Click here for a copy of “Assessing the Potential Impact of the Affordable Care Act on Uninsured Community Health Center Patients: An Update” and here to see an accompanying infographic.
Kim Krisberg is a freelance public health writer living in Austin, Texas, and has been writing about public health for more than a decade.