Federal health funding is getting cut across the board, from NIH research to Covid-19 recovery grants.
Community health center (CHC) leaders are concerned they’re next on the chopping block after President Donald Trump issued (then rescinded) a funding freeze in February.
CHCs play a key role in the provider ecosystem, serving 31 million people in the US, according to KFF. They’re often the first touchpoint for primary care, and offer services that reach historically underserved communities.
But they’re “struggling right now financially,” Joe Dunn, chief policy officer at the National Association of Community Health Centers, told Healthcare Brew.
“Any kind of disruption could have an outsized impact, and that would really lead to not only an inability to plan for the future but also having to take a really hard look at the services that are provided to the health center patients and the staff,” he said.
Funding fears. In FY 2025, $8.2 billion was allocated to the Health Center Program, which funds 1,400 health centers across the US. Funding was set to expire in March, but Congress recently extended it with an additional $4.3 billion through September.
Meanwhile, Medicaid is the “lifeblood” of these centers, Dunn said, so if Congress makes cuts in its new budget, which is reportedly expected, the health centers could suffer.
CHCs really depend on federal funding, Dunn said, with about 50% of their patients on Medicaid, 11% on Medicare, 20% commercial, and 19% who are uninsured. For the uninsured population, he added CHCs get about $6 billion from the federal government to support those patients without coverage.
Some CHCs also rely on the 340B program—which provides drug discounts to providers treating publicly insured or uninsured patients at high rates compared to the commercially insured population—as well as HIV/AIDS and maternal health programs, Dunn said.
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On the other hand, Medicaid cuts could lead to a larger uninsured demographic, which puts financial strain on providers like CHCs, Dunn said. More than 71 million people are enrolled in Medicaid in the US, and research organization the Urban Institute estimated cuts could raise the uninsured population by 10.8 million people.
Having insurance not only benefits the patients, Dunn said, but also the providers whose finances—and therefore, care quality—depend on it.
Rural health clinics. In addition to CHCs, rural health clinics (RHCs) are also concerned about funding cuts, Sarah Hohman, director of government affairs for the National Association of Rural Health Clinics, told us.
RHCs serve—surprise, surprise—rural populations with clinician shortages. These centers also rely on federal funding to serve their patients (made up of 20.2% Medicare, 12.6% Medicare Advantage, 26.5% Medicaid, 32.5% commercial, and 6.6% uninsured).
But in contrast to federally qualified health centers, RHCs receive enhanced Medicare and Medicaid reimbursements after care is provided instead of grant funding up front. What the two models have in common, though, is their reliance on Medicaid.
While Hohman said she’s waiting to see how the budget works out, she also has “significant concerns” about HHS staffing cuts, which have been making it difficult for clinics to plan future care.
“I don’t think it’s too hard to imagine how without stability in [Medicare and Medicaid funding] streams, we can certainly see closures, and there aren’t other clinics ready to pop into those markets if facilities in rural America close,” she said.