Sara Rosenbaum, Maddie Krips, Elizabeth Dutta, Feygele Jacobs
March 2025
Community health centers play an essential role in providing care and services to Medicare beneficiaries who live in communities with severe primary care provider shortages and face serious access barriers. In 2023, 3.43 million Medicare patients, both older adults and working-age adults with severe disabilities, received care at a community health center (CHCs). (Table1) Like health center patients generally, the overwhelming majority of Medicare patients are low income.
Medicaid is essential to Medicare CHC patients. Two in five CHC Medicare patients (1.35 million) are dual enrollees (also referred to as "dual eligibles") who have both Medicare and Medicaid coverage – a figure more than twice as high as the national average of 15%. (Figure1)
Medicaid is crucial for dually-enrolled Medicare CHC patients because it pays Medicare premiums, deductibles and copayments. For many beneficiaries, Medicaid extensively supplements what Medicare covers, providing coverage for vision and dental care, in-home assistance, and long term institutional and community-based care for serious physical, mental health, and substance use-related health conditions. In recent years, CHCs have significantly increased the range and scope of long-term and chronic care services, and several now offer the Program of All-Inclusive Care for the Elderly (PACE). In 2024, more than three quarters of all CHCs screened all patients for behavioral health needs, 66% offered substance use disorder treatment and 62% offered medication assisted treatment for those with substance use disorders.
Congress is now poised to begin debate on nearly $900 billion in proposed Medicaid spending reductions over the next decade. These reductions would take many forms: reducing federal payments to states; eliminating special enhanced funding for poor working-age adults made eligible as a result of the Affordable Care Act; not counting certain types of state Medicaid spending, thus making it harder for states to raise the money they need to qualify for federal funding; and forcing states to impose strict new work and reporting rules shown to have caused widespread losses of coverage among eligible adults.
Medicaid Cuts Will Harm Medicare Patients
Medicaid’s enormous costs mean that unprecedented federal Medicaid cuts will force states to adopt major reductions in eligibility and benefits. Medicare beneficiaries are among the costliest populations.
Older people and people with serious disabilities represent 14% percent of all people enrolled in Medicaid but 32% percent of all Medicaid expenditures. To save money, states may completely end coverage for all but the very poorest Medicare beneficiaries who also receive Supplemental Security Income (SSI) assistance and whose coverage is mandatory. This would eliminate eligibility for beneficiaries who depend on Medicaid to pay their Medicare Part B premiums, which cover health center services, as well as cost sharing assistance. Medicare patients literally could effectively become uninsured for their medical care, other than hospital and skilled nursing facility care.
States also could maintain bare-bones eligibility for Medicare premiums and cost sharing but eliminate or dramatically scale back many types of services, including vision and dental care (which are optional), extended home health care, occupational and physical therapy, case management, and home and community-based services and supports, which many CHCs now offer. States could eliminate community mental health and addiction recovery programs, on which many Medicare patients with disabilities rely.
Work requirements could harm working age Medicare patients
A Medicaid work mandate that passed the House in 2023 but did not become law is expected to serve as the template for this year’s anticipated work requirement legislation. The 2023 legislation contained no exemption for dually eligible working-age Medicare beneficiaries whose coverage is tied to disability. As a result, people with disabling conditions could be subjected to work and reporting rules that they simply cannot meet. Work mandates have been shown to create huge navigation burdens for affected people and to dramatically reduce enrollment.
FQHC Payments Could be Seriously Affected
CHCs are entitled to special Federally Qualified Health Center (FQHC) payment rules that ensure payments reasonably reflect the cost of covered care. It is not just patients losing Medicaid entirely that could affect health center revenues. As Medicaid-covered services decline, payments will naturally decline. Even if services don’t get completely eliminated, states could place tough restrictions on the amount and scope of what they will cover, leaving coverage and payments well below the level that patients need, especially for more time-intensive and costly in-home and community care. States could cease updating annual FQHC payment rates to reflect higher costs and greater intensity, and could introduce long delays in reconciling payments made to what health centers are owed (often referred to as the FQHC wraparound.)
Advocates of large-scale Medicaid spending reductions argue that massive savings can be achieved simply by reducing fraud and waste. But the evidence shows otherwise. In fact, states cannot simply absorb the projected loss of federal Medicaid financing over a decade without making deep reductions in program size and scope. Federal funding losses of the magnitude under consideration mean that states will be unable to spare any population or service group deemed optional under federal law. They will also be unable to avoid steep provider payment cuts, which in the case of CHCs, necessitates wide-ranging reductions in what health centers are paid through the FQHC payment system. The evidence is irrefutable – there simply is no safe level of federal Medicaid spending reductions.