Phil Galewitz, KFF Health News
Bluestem Health, a clinic that serves low-income and uninsured sufferers in Lincoln, Nebraska, has misplaced cash for the final two years.
And CEO Brad Meyer fears instances will quickly worsen for the clinic and its 21,000 sufferers. That’s as a result of Nebraska is ready to grow to be the primary state to require sure Medicaid enrollees to work or lose their protection underneath new guidelines in President Donald Trump’s One Big Beautiful Bill Act.
“This will have a huge financial impact on us,” Meyer stated. On May 1, seven months earlier than the legislation requires, the state will start imposing work necessities on eligible grownup Medicaid enrollees.
Most of Bluestem’s sufferers are lined by the federal government program for individuals with low incomes or disabilities. Meyer estimates as much as 15% of them could also be kicked off Medicaid, which might value his heart about $600,000 a yr. That might imply chopping providers or workers.
Nationwide, about 17,000 federally funded group well being facilities like Bluestem care for 1 in 7 Americans. They’re bracing for fallout from the legislation Trump signed final yr, which might value the nonprofit well being facilities $32 billion collectively over 5 years, in response to the Commonwealth Fund, a well being analysis basis.
Health facilities obtain annual federal grants however rely on Medicaid reimbursements for affected person care as their largest income. The authorities insurance coverage program lined about half of their roughly 33 million sufferers in 2024.
Commonwealth estimates that 5.6 million sufferers of well being facilities will lose Medicaid protection over the following decade as most states enact work necessities — a provision of Trump’s legislation that requires nondisabled enrollees to work, volunteer, or carry out one other authorised exercise for no less than 80 hours a month.
Most are anticipated to lose protection not as a result of they don’t work however due to paperwork errors, like failing to doc their hours or confirm that they qualify for an exemption.
Health heart officers say there’s no simple strategy to make up for the misplaced income aside from chopping workers or providers, which might have an effect on all their sufferers. The cuts will coincide with an anticipated improve in sufferers, as individuals who lose protection flip to the clinics for low-cost care.
By legislation, well being facilities are required to deal with all sufferers no matter their means to pay.
A Double Whammy
Overall, about 10 million fewer Americans could have insurance coverage by 2034, the Congressional Budget Office estimates, each due to Trump’s legislation and congressional Republicans’ resolution to reduce premium subsidies for Affordable Care Act well being plans.
“We are incredibly worried,” stated Jeffrey McKee, CEO of Community Health Centers of Burlington in Vermont. His clinics deal with about 35,000 sufferers a yr, practically a 3rd lined by Medicaid.
He predicts a surge in uninsured sufferers will value one other $3 million in misplaced income. That income crash might imperil road medication applications and residential look after sufferers 65 and older, he stated.
In 2024, group well being facilities lost money due to rising prices and the expiration of covid pandemic-era reduction funds, in response to a KFF evaluation.
Centers with excessive charges of uninsured sufferers sometimes battle extra financially, whereas some facilities are sustained via personal donations.
People with out insurance coverage — who made up about 18% of all well being heart sufferers in 2024 — pay on a sliding scale. Those quantities are a fraction of what insurers pay.
The new Medicaid work necessities apply to Washington, D.C., and 40 states that expanded Medicaid eligibility underneath the ACA, and to adults with incomes as much as 138% of the federal poverty degree — $22,025 for a single individual this yr.
Republicans say the work necessities will nudge individuals into the workforce and assist protect Medicaid for youngsters and people who find themselves pregnant or have disabilities. Studies by KFF and others present most enrollees already work, go to high school, or have a well being situation that stops them from working.
Nebraska Is First Up
The Trump administration authorised Nebraska’s early launch of its work requirement program, which might have an effect on about 72,000 Medicaid expansion enrollees. State Medicaid officers say they plan to make use of state and nationwide databases to test whether or not individuals are already working or assembly an exemption so that almost all gained’t should do something to maintain protection. But 1000’s might want to show they fulfill the necessities.
At Bluestem in Lincoln, Meyer worries a lot of his Medicaid sufferers gained’t take the steps wanted to maintain protection.
Angelisa Corum, 57, stated she loves the care she has gotten from her common physician at Bluestem Health over the previous dozen years, notably in coping with breast most cancers. “I am cancer-free, and they helped me get through that,” she stated.
She stated the care was the identical when she was lined by her husband’s business insurance coverage via his employer and when she was on Medicaid whereas he wasn’t working.
The work necessities are only one a part of the Republican legislation handed final yr that might damage the well being facilities. It additionally requires extra frequent eligibility checks for adults enrolled underneath Medicaid enlargement, which advocates say might additionally lead individuals to lose protection. Many states now require eligibility checks solely yearly.
The legislation additionally reduces total federal Medicaid funding to states, which can immediate them to chop reimbursements to facilities and different well being suppliers.
The National Association of Community Health Centers, the most important advocacy group for the clinics, has tried to stroll a tightrope, warning about impending cuts from the legislation whereas nonetheless working with the Trump administration. The group praised Congress for growing base grant funding for well being facilities within the federal finances authorised in January.
Kyu Rhee, CEO of the nationwide affiliation, stated the clinics take pleasure in robust bipartisan help in Washington regardless of the Medicaid cuts.
He has met with Trump administration officers to debate how well being facilities can play a job in holding individuals from dropping protection because of work necessities. He stated they may help meet different priorities of the administration’s, like bettering American diets, increasing major care, and specializing in continual ailments — although it’s unclear how any of that may lead to extra funding.
To additional present the attain of well being facilities, the affiliation not too long ago funded a examine that discovered 52 million individuals visited the clinics over a three-year-period. “It makes a statement we serve a lot more Americans than those from just a single year,” Rhee stated.
Health heart officers are hopeful they are going to get a number of the funding from the $50 billion Rural Health Transformation Program included within the GOP-passed legislation. States will start spending the primary tranche of that cash this spring.
Rhee stated he’s inspired that states could have expertise to assist faucet into databases to confirm many enrollees’ work standing or well being situations to fulfill “medical frailty” guidelines that might assist them keep away from being disenrolled.
Others are much less optimistic.
“Health centers are bracing for a major financial impact,” stated Sara Rosenbaum, a well being legislation and coverage professor at George Washington University and Medicaid skilled who co-authored the Commonwealth Fund examine. “The way they cope is the same way health systems usually cope as they go through mass layoffs, site closures, and service reductions.”
Amanda Pears Kelly, CEO of Advocates for Community Health, a commerce group representing 52 well being facilities, stated well being facilities are additionally apprehensive about rising prices, particularly for pharmaceuticals. The impending monetary challenges will make it harder to rent workers each in rural areas the place medical doctors and nurses are scarce and in additional populated areas, the place competitors for staff is extra acute, she informed KFF Health News.
“The challenge is health centers are being hit from every direction,” Pears Kelly stated.
