Community Health Centers: A 2013 Profile and Prospects as ACA Implementation Proceeds

In 2013, more than 1,200 federally funded community health centers provided access to care for low-income populations living in medically underserved communities throughout the country. The Affordable Care Act made expansion of health centers a key part of its strategy for ensuring that these communities would realize the benefits of increased health insurance coverage for their residents. As health insurance coverage expands under the Affordable Care Act (ACA) and the demand for primary care increases, the role of health centers is likely to increase. A key question going forward is whether health centers’ expanded capacity, developed over the past five years, will be sustained going forward.

2013 profile

• Health centers’ safety-net role. In 2013, 1,202 federally funded health centers operating in 9,170 sites provided 61 million medical care visits, 11 million dental visits, 6.6 million visits for behavioral health needs, and 5.1 million visits for enabling services such as case management. In all, health centers provided more than 85 million visits. Another 100 “look-alike” health centers funded by states and localities served an additional 1 million patients. More than 70% of health center patients have income below 100% of the federal poverty level (FPL), which is $11,770 for an individual and $20,090 for a family of three in 2015. Nearly 60% are women; almost all (93%) are children and working-age adults. A majority of health center patients are people of color.
• Health center patients. Over one-third (35%) of health center patients were uninsured in 2013, and 41% were covered by Medicaid. As the ACA is implemented, early evidence suggests that the proportion of insured patients in the health care system will grow substantially. At the same time, however, the uninsured rate among health center patients is expected to remain high, because millions of people who will remain uninsured lack other sources of care. In 11 states and the District of Columbia, health centers serve over 30% of the low-income population.
• Scope of services. Health centers provide primary care spanning physical, dental, and behavioral health care. They also provide enabling services, such as translation and transportation, which help patients to access care. Between 2000 and 2013, the number of health centers offering dental and mental health services grew, by 22% and 81%, respectively, reflecting both increased federal resources and widespread need for such care. Although the percentage of health centers offering substance abuse services has declined slightly, dramatic growth in the number of health centers between 2000 and 2013 means also that the total number of health centers offering these services has increased.

Health centers and Medicaid

• Medicaid support. In 2013, Medicaid provided 40% of health center operating revenues, making the program the single largest source of health center financing. Medicaid’s large financing role reflects the large share of health center patients covered by Medicaid, as well as Medicaid’s prospectively set, cost-based payment system, which is also used by Medicare, CHIP, and Qualified Health Plans sold in the ACA Marketplaces. Operating grants that health centers receive through the federal annual appropriations process provide crucial support for care for uninsured patients and for services not covered by insurance. The ACA augmented regular appropriations for health centers with a dedicated five-year, $11 billion Health Center Trust Fund that has supported the establishment of new health centers and sites and initiatives to build service capacity in key areas.
• Health centers in Medicaid expansion versus non-expansion states before the ACA. Even before the ACA, health center patients in states that later expanded Medicaid were significantly more likely to be covered by Medicaid and less likely to be uninsured, compared to those in states that have not expanded Medicaid, reflecting broader Medicaid eligibility for adults in the pre-ACA period. By extension, health centers in expansion states also had higher revenues per patient and derived a larger share of their total revenues from Medicaid. Overall, leading up to 2014, they were in a stronger revenue position to expand patient capacity and the scope of their services, and their states’ decisions to expand Medicaid enhanced their position. About half of the 22 states that have not expanded Medicaid are southern states that have among the highest poverty rates in the nation as well as high uninsured rates. These states’ decisions not to expand Medicaid have a disproportionate effect on African-Americans, who reside in high numbers in the southern states and are more likely to be low-income and uninsured than the general population. One in four health center patients in the non-expansion states is African-American.
• Health center opportunities and challenges under the ACA. The share of health center patients who are uninsured is expected to decline significantly because of expanded coverage under the ACA. However, especially in non-expansion states, health centers will continue to treat high numbers and shares of uninsured people. In addition, health centers can expect to face significant uncompensated care costs even for patients who are insured, attributable to cost-sharing for covered services that low-income patients may be unable to pay, treatments and services not covered by insurance, such as vision and dental care for adults, and care provided to insured patients in plans whose provider networks do not include their health center.

Looking ahead

The ACA made significant investments in health coverage and care for disadvantaged communities. As implementation of the health reform law continues, the experience of health centers serves as one bellwether of its impact on these communities. Measures of health centers’ scope and activity, and of rates of coverage and access among their patients, are important gauges of how the ACA goals are translating into improvements for the populations and communities most at risk of disparities in health and health care. Moving forward, analyses that investigate the implications of state Medicaid expansion decisions for health centers and their patients can illuminate the relationship among Medicaid expansion, health center capacity, and access to care.