CHCs' Role in Health Care Reform Undermined by State Funding Decreases

The economic recession has led to a reduction in state funding for community health centers, or CHCs, during the past few years, and this trend is threatening to undermine the role of CHCs as a key component of the Patient Protection and Affordable Care Act, according to individuals with the National Association of Community Health Centers, or NACHC.

The health care reform law provides an additional $11 billion in dedicated funding for CHCs during the next five years. This funding increase is expected to double the size and reach of CHCs by 2015 and give them a much greater role in the evolving health care system. But the projected growth of CHCs is based, in part, on the current level of state funding, according to the NACHC.

During the past three years, state funding for CHCs has dropped by 42 percent. It now has fallen below 2006 funding levels, which compromises the ability of the health centers to meet growing patient demand, according to the NACHC. The health care reform law is expected to bring 32 million more people into the health care system by 2014, creating an even greater demand for primary care services and CHCs.

"The federal government has invested additional resources in health centers, and at the same time, states have been significantly cutting back," said Dawn McKinney, director of state affairs for the NACHC. "It is incongruent with the goals of expansion and serving additional people."

In their current capacity, CHCs serve as patient-centered medical homes for a patient population that is disproportionately low-income and predominantly uninsured or publicly insured. The centers currently are funded at $2.2 billion annually and provide care to 20 million people through about 7,000 sites nationwide. With the funding provided by health care reform, CHCs are projected to serve 40 million people by 2015 and to double the number of sites. However, that expansion now is complicated by state cutbacks.

In the current fiscal year, 23 states have decreased funding for health centers. Seven states increased funding, and another seven maintained level funding for CHCs, according to an NACHC report (15-page PDF; About PDFs) released in October. Of the 23 states that decreased funding, eight cut funding for CHCs by 20 percent or more from the previous fiscal year, and four states -- Arizona, California, Montana and South Carolina -- eliminated health center appropriations altogether.

For the most part, state funding is used for existing services, and federal funds are targeted for increased patient caseloads, additional services and new sites, McKinney told AAFP News Now. For example, she said, "California eliminated all state funding. That does not mean that the California health centers are going to make that (lost funding) up in federal funding."

McKinney acknowledged that "states are in dire straits and have to balance their budgets." But in some cases, health centers "depend on state funding to keep their doors open," she noted.