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Health Reform

States’ Medicaid Decisions Cost Community Health Centers

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

By Phil Galewitz
Kaiser Health News

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.

“Approximately 72 percent of health center patients who would have gained coverage but will remain uninsured live in southern states,” the study authors wrote.

In North Carolina, about 214,000 of the state’s 411,000 community health center patients were uninsured in 2011. Of that number, 147,000 of them would have become eligible for Medicaid had the General Assembly decided to expand the program. The George Washington University researchers estimated community health centers would have gained about $73 million in revenue had North Carolina expanded Medicaid, without the expansion 2014 revenue gains come to only $40 million.

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. In North Carolina, 31 percent of patients in community health centers will be uninsured.

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.”

“The fact is we’re still gonna have to provide care for those people and it’s gonna happen in community health centers, and free clinics and emergency departments,” said Ben Money, head of the N.C. Community Health Center Association. “Those costs are gonna get shifted, particularly to those who have insurance.”

Money argued that North Carolina taxpayers pay out to other states which are now using those dollars to cover their uninsured, but North Carolina won’t see the benefit.

“So now we’re paying twice,” Money said.

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

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