States’ Medicaid Decisions Cost Community Health Centers

October 25, 2013

Community health centers will pay a steep price for states’ decisions not to expand Medicaid under the federal health law.

A new study by George Washington University researchers estimates that 518 health centers in the more than two dozen states not expanding Medicaid will lose out on $555 million next year because their uninsured patients won’t get Medicaid or federally subsidized coverage in the new online health insurance marketplaces.

“That is huge,” said Peter Shin, lead author of the study and  associate professor of health policy at George Washington University. He said loss of money can affect centers’ ability to hire doctors and other staff, as well as to expand services. He said health centers expect increased patient demand regardless of whether their state expands Medicaid.

The 582 health centers in states expanding Medicaid can expect to gain about $2 billion in funding next year from seeing more patients in line to get coverage, the study said.

Nationally, about one third of health centers’ 21 million patients are uninsured.   Had all states opted to expand the state federal program for the poor,  most of them — or about 5 million of the centers’ 7.4 million uninsured patients –would have gained coverage through either Medicaid or subsidized private coverage sold through online insurance marketplaces.  With about half of the states not expanding, however, about 4 million center patients will gain coverage, the study said.

Centers in Alabama and Mississippi will be left with the highest rate of uninsured patients, at 43 percent and 42 percent respectively, the study added.

Dan Hawkins, senior vice president of the National Association of Community Health Centers, said health centers will survive in states that don’t expand but many of their patients will be in a tougher spot because they will be less able to get the care they need.

“The real tragedy is the human pain this will cause,” he said.

He said health centers will use money from treating more of the insured to improve and expand services. “This money won’t be used to hang fancy drapes in the board room,” he said. “It will be plowed back into caring for patients.”

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communications organization not affiliated with Kaiser Permanente.

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