Federally funded health centers brace for financial loss

• Funding cut-off assumed more patients would be covered by Medicaid
• Many still see insurance as too costly
• Centers struggle in states without Medicaid expansion

Federally funded health care centers, already straining to makes ends meet, now are fighting to block a 70% cut in their funding next year.

The more than 9,000 health clinic centers, which serve 22 million mostly poor patients, were supposed to be big beneficiaries when an estimated 7 million more people were enrolled in health insurance under the Affordable Care Act . So while losing $3.6 billion a year in federal funding in October 2015 would be a steep reduction in support, it hadn't seemed as problematic when the law passed four years ago as it does now.

"It would be nice to think that Congress really thought it through, but they didn't," said Dan Hawkins, policy director at the National Association of Community Health Centers.

Unlike privately run free clinics, these "federally qualified health centers" are open to all, regardless of insurance coverage or ability to pay, and they charge uninsured patients on a sliding scale based on income. They are run by boards, a majority of whose members are patients. Like emergency rooms, they have to treat everyone who shows up, but are designed to be more cost-effective in treating these populations. More than a third of their patients lack insurance.

The group is lobbying to extend its federal funding under the ACA for an additional five years — to cover fiscal years 2016 through 2020 — as it grapples with the challenges and benefits of life after ACA's enactment.

Next year's funding loss will hit far harder than expected for three reasons:

•Medicaid has not been expanded in about half of the states. The ACA assumed people under 138% of the federal poverty limit would be on Medicaid, but a Supreme Court decision last year let states decide whether to expand Medicaid to cover the poorest of the poor. So, in many states, the sickest patients with the least ability to pay are still using their local clinics for health care.

•Enrollment in ACA exchange plans is well below expectations. At La Clinica Del Pueblo, a Washington, D.C., center that serves about 80 patients a day, little has changed since the Jan. 1 deadline to sign up for insurance, when centers hoped newly enrolled consumers would start showing up. "The enrollment process has been so arduous that we haven't seen an influx of patients," said Alicia Wilson, executive director of the center,

•Insurance is still seen as too costly by many. Some uninsured patients don't believe they need health insurance because they are able to receive low-cost health care from these clinics. This makes outreach and education far more important. La Clinica and Unity Health Care center, also in D.C., both received grants to hire new staff for outreach, education and enrollment, which will help combat some of the misconceptions.

"There is a lot of hope, and there is a lot of skepticism at the same time," Wilson said.

The federal money hospitals get to help cover the cost of treating the uninsured people who walk in was supposed to be phased out beginning this year, but was extended due to the troubled roll-out of the new law. But the health centers that are designed to keep people from using emergency rooms as their primary care doctors have received no such relief.

Yes, they're getting more people in the door with insurance or Medicaid. But many procedures aren't covered or the out-of-pocket costs are so high as to be prohibitive. Foundations that once helped fill funding gaps sometimes think the new law has solved the centers' problems so are donating to other health-care areas or issues. And while provider networks remain small in many areas, they are still competing for the same patients.

"Our concern is that as more entities capitalize on the insured patients, we'll be left serving only uninsured patients, which is unsustainable," Wilson said.

Federal funding makes up about 23% of centers' budgets. About 13% comes from grants and contracts from state and local governments, a number that dropped by about 50% between 2007 and 2012 due to fiscal problems during the recession, Hawkins said. About 4% comes from private donors, especially foundations. The rest comes mostly from Medicaid, Medicare and private insurance.

Great Salt Plains Health Center, which has locations in Cherokee and Medford, Okla., loses money every year because of the number of uninsured patients it serves. A third are uninsured and low income, said CEO Tim Sharkey. Oklahoma didn't expand Medicaid, so many people don't qualify to get subsidized insurance on the federal insurance exchange or Medicaid.

"We could never do without the federal grant money," said Sharkey.

Community of Hope, also based in Washington, D.C., was awarded a $6.25 million grant to open a new facility in the under-served Ward 8 of the city, said Executive Director Kelly Sweeney McShane. But it is dealing with other realities of the post-ACA world. More foundations, for instance, are shifting funding from medical care to job training, new buildings and strategic planning.

"We still need help," said McShane. "I still think people are going to fall through the cracks."

Contributing: Fola Akinnibi