Community health centers face major funding loss

Millions of low-income Americans would lose access to primary healthcare if an expiring funding provision in the Patient Protection and Affordable Care Act is not extended, a study warns.

Advocates for extension say the impact of letting the provision expire on Sept. 30, 2015, would be felt across the healthcare system in the form of higher rates of emergency department utilization and hospital admissions.

Not extending the ACA funding provision could lead some of the country's 1,300 centers to shut down, said Leighton Ku, a professor of health policy at George Washington University. “We know that there is a growing shortage of primary-care physicians,” Ku said. “If health centers aren't there, it will mean that this becomes that much worse and it will principally affect low-income people.”

The number of Americans served by community health centers could drop from 25.6 million in 2014 to 18.8 million by 2020 if no additional states were to expand Medicaid by 2020 and if the mandatory funding allocated by the ACA is not extended, according to Ku's study released last week by George Washington University.

The centers, which have about 9,000 sites across the country, are considered a key source of primary care for many Americans who gain insurance under the Affordable Care Act, as well as for the uninsured, since they serve people regardless of ability to pay. The centers are dependent on two major funding streams—federal, state and local grants and contracts, and Medicaid, each of which made up approximately 39% of the $15 billion in total revenue clinics received in 2012, according to the study.

The bulk of grant funding that community health centers receive comes from the federal Bureau of Primary Health Care in the form of Section 330 grants under the Public Health Service Act. An ACA provision provided a cumulative total of $11 billion in mandatory funding from 2011 to 2014 in addition to the regular annual discretionary appropriations for the centers.

“The grant is kind of like the foundation that holds up the house,” said Daniel Hawkins, vice president for federal, state and public affairs for the National Association of Community Health Centers. “The grant really ends up covering the cost of care for the uninsured and the underinsured.”

On average, 36% of patients at community health centers are uninsured, while 40% are covered through either Medicaid or the Children's Health Insurance Program, according to NACHC estimates. About 14% are privately insured and 8% are covered through Medicare. Overall, about 72% of health center patients are low-income, earning up to 100% of the federal poverty level.

But the mandatory ACA funding, which Hawkins estimates makes up as much as 70% of the total federal grant allocation health centers receive, is set to expire next year. Not extending it would create a budget hole many centers would be unable to fill. They either would have to reduce their scope of services or raise their sliding-scale charges, which would create barriers to access, Hawkins said. The biggest impact would be in states that have not expanded Medicaid to adults earning up to 138% of the federal poverty level.

“Some community health centers will have to close sites and lay off staff, and some of our smaller health centers would have to close, period,” said Robert Pugh, executive director for the Mississippi Primary Health Care Association, representing 21 community health centers that annually provide care for more than 300,000 residents at more than 170 sites.

“The only other option many would have to receive care would be to receive those services inappropriately at hospital emergency rooms, or go without services and wait until they have an emergency.”

Pugh said the centers are vital in managing chronic diseases among low-income people, who have higher rates of cancer, stroke, heart disease, diabetes and hypertension than more affluent people.

Community health centers traditionally received strong bipartisan support in Congress, and President George W. Bush was a big backer of using them to expand care for low-income and uninsured Americans. But Republican support has waned since the Obama administration expanded funding for the centers through the 2009 budget stimulus package and the healthcare reform law.

Follow Steven Ross Johnson on Twitter: @MHsjohnson