While the past three years managing through a pandemic were challenging, health centers are now bracing for what we expect to be a difficult year for new reasons altogether. Early on in the COVID epidemic, Congress authorized a temporary 6.2 percentage point Federal Medical Assistance Percentage (FMAP) increase for states, under one condition: they had to maintain continuous enrollment of nearly all Medicaid enrollees, without any efforts to redetermine whether individuals’ eligibility had changed due to changes in their income or other factors. While we knew this arrangement was temporary, the end has officially arrived. As part of the FY23 omnibus package passed in December, Congress lifted this requirement, allowing states to redetermine eligibility for the nearly 84 million individuals enrolled in Medicaid beginning February 1. If states find that individuals are no longer eligible for Medicaid, they can drop beneficiaries from coverage beginning April 1.

Recently, the Biden Administration announced its intent to end the COVID-19 public health emergency on May 11, 2023. Over the past few weeks, the Department of Health & Human Services (HHS) provided additional guidance and a roadmap to ensure a smooth transition for states. On a call on February 13, HHS stated that more guidance will be provided by June/early summer, which will include updates for free COVID-19 testing for uninsured individuals as well as a possible special enrollment period in the Marketplace for individuals no longer eligible for Medicaid.  CMS also provided fact sheets and other resources , including a State Medicaid & CHIP Telehealth Toolkit.

While the number of Medicaid enrollees who may be disenrolled during the “unwinding” period is highly uncertain, it is estimated that millions will lose access to Medicaid coverage. KFF estimates that between 5.3 million and 14.2 million people will lose Medicaid coverage once the continuous enrollment provision ends.

At ACH, we expect this new policy to pose a significant risk to federally qualified health centers (FQHCs), as Medicaid provides healthcare coverage to over 48% health center patients, or to about 15 million patients, and made up 41% of health center revenue in 2021. But a new report from the Geiger Gibson / RCHN Community Health Foundation Research Collaborative puts the facts into stark reality: up to 2.5 million community health center (CHC) patientscould lose their Medicaid coverage once continuous enrollment ceases.

This widespread coverage loss could trigger a deficit of $1.5 billion to $2.5 billion in patient revenue for health centers, which amounts to between 4% and 7% of total health center revenue nationally. By law, health centers must “provide comprehensive, high-quality primary care and preventive services regardless of patients’ ability to pay”. However, a revenue impact of this size means that CHCs, the nation’s largest primary care system for medically underserved rural and urban communities, could be faced with increasing challenges to serve between 1.2 million and 2.1 million patients; with a sharp reduction in resources, health centers also could lose the ability to employ or retain 10,700 to 18,500 of their staff. The study is based on estimates of the unwinding’s impact prepared by the Urban Institute, as well as data on community health centers from the 2021 Uniform Data System data. The study’s authors at the George Washington University Milken Institute School of Public Health  report that these estimates likely are low, since they are based on 2021 health center data and the number of patients served by CHCs likely increased over the 2022-2023 period.

Fortunately, ACH members have been preparing for this unwinding process for over a year, instituting best practices such as outreach and enrollment navigation services, close coordination with state Medicaid offices, and consistent communication with health center patients.

Unfortunately, the Medicaid unwinding is not the only blow to health centers’ bottom lines in 2023. The unwinding process coincides with the expiration of both supplemental COVID funding (7% of health center revenues in 2021) and the Community Health Center Fund, the largest portion of funding for health centers.  With program specific dollars provided to health centers also uncertain, the safety net is left seriously depleted and at risk. Making an already dire situation worse, the 340B program, a vital revenue stream for federally qualified health centers, is slowly being eroded by the actions of state policymakers, pharmaceutical companies, and pharmacy benefit managers.

Health centers are required to serve every patient who walks through their doors, regardless of their insurance status or ability to pay. But to do so, we need an investment from the federal government that matches the need in our communities; this comprehensive, culturally, and linguistically competent care also requires a strong health center workforce.

In the coming weeks and months, we will be advocating for increased investment in health centers to help serve the more than 30 million patients  that rely on us every day: $9B in total funding for FY2024, with committed increases over time to help health centers build the future of primary care. We look forward to continuing this conversation with policymakers and our members.

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