By Peter Shin, Jessica Sharac, Sara Rosenbaum, and Maria Velasquez

Highlights

Health centers rely on Medicaid as a major source of operational funding. Based on estimates of Medicaid disenrollment by immigrants and their family members as a result of the final public charge rule’s chilling effect, we find that health centers nationally could lose between 165,000 and 495,000 Medicaid patients annually, and that as revenue falls, the number of patients served will drop by between 136,000 and 407,000 nationally; California alone could lose as many as 142,000 patients and New York health centers could see patient care capacity drop by over 77,000.

Background

On August 14th, the Department of Homeland Security published a final rule defining who can be considered a public charge in granting permanent residency or other adjustments of immigration status. This highly complex rule is likely to have a major “chilling effect” on enrollment by immigrants and their families into public benefit programs for which they are eligible, including Medicaid. Anecdotal evidence also suggests that people subject to the rule and their families may avoid seeking even the services of community-based programs available to all community residents. The nation’s community health centers represent one such community-based program. In 2018, health centers served over 28 million residents of medically underserved urban and rural communities. Many of these communities have significant immigrant populations.

This Policy Note updates our earlier estimates of the rule’s likely effect on health centers and their communities. As in our earlier analysis, we find that the chilling effect is likely to have a major impact on Medicaid enrollment, which in turn will cause a significant decline in the revenue on which health centers depend to serve their communities as a whole. This type of revenue decline will cause health centers, like other health care providers affected by significant revenue losses, to scale back care and reduce access points as well as staffing. Our earlier estimate of the impact of the proposed rule showed that approximately 354,000 to 646,000 community health center patients nationally would lose Medicaid coverage, resulting in Medicaid revenue losses of $346 million to $624 million and reducing health center capacity for as many as 538,000 patients and employment for up to 6,100 staff.

Basis for our estimates

For health centers, the major policy change under the final rule is its Medicaid exemption for pregnant and postpartum women and children up to age 21. The rule continues to exempt Medicaid received by refugees and asylees as well as Medicaid coverage for emergency medical conditions (under federal law, the emergency care exemption focuses on care rendered in hospital emergency settings and therefore has little relevance to health centers). Since pregnant women and children represent a significant proportion of Medicaid enrollees, their exemption from the rule may lessen the impact on health centers. However, the rule is also expected to have a major chilling effect, even on exempt populations; while DHS largely dismisses evidence of the chilling effect in estimating impact, it admits that the impact could be significant. Indeed, a recent Urban Institute study showed that 14 percent of adults in immigrant families dropped out of or did not apply for noncash public benefit programs due to concerns that their use would affect the chances of getting a green card. This study also showed that the rate of non-participation was higher in families with children (17 percent) compared to families without children (nine percent) and in low-income (less than 200 percent of the federal poverty level) families (21 percent) compared to higher-income families (nine percent). More than four in ten (42 percent) of adults who reported chilling effects did not participate in Medicaid/CHIP.

Based on these data, Leighton Ku estimated that between 1.0 and 3.1 million (6.2 to 18.5 percent) current Medicaid enrollees who are members of low-income immigrant families may exit the program or decline to enroll annually. For this policy brief, we applied these loss percentages to the estimated number of health center patients with Medicaid coverage in families with at least one immigrant member, which was calculated using 2018 Uniform Data System (UDS) data on patients best served in a language other than English and 2016 American Community Survey (ACS) data. We estimated losses using the 2018 UDS state and national averages for Medicaid revenue per patient, total cost per patient, and cost per medical provider.

In 2018, 1,362 health centers served 28.4 million patients, of whom 91 percent were of low income and 48 percent were covered under Medicaid. Given that health centers do not collect data on patient citizenship status, we used national and health center data to estimate the population size, updating the methodology used in our prior study.[1] This analysis includes more current health center data from 2018 with additional adjustments using the Urban Institute’s percentage of low-income adults reporting chilling effects (20.7 percent) and the percentage among those who reported dropping Medicaid (42 percent). Both the high and low estimates include immigrants and other members of immigrant families. The low estimates assume a more conservative loss of 6.2 percent in family members who may be “chilled out” of Medicaid participation, while the high estimates are based on a loss of 18.5 percent.

Table 1 shows state and national estimates of the number of health center patients who would lose Medicaid coverage and the resulting low and high estimates of loss of Medicaid revenue, patient capacity, and staff.

Table 1. Estimates of the Effect of the Final Public Charge Rule on Community Health Centers

Note: Total U.S. figures do note include health centers in U.S. territories or freely associated states

We estimate that between 165,000 to 495,000 health center patients nationwide would lose or forgo Medicaid coverage due to the public charge rule. The estimates account for “chilling effects” that would keep eligible family members from participating in Medicaid due to the potential impact on their residency status.

California and New York health centers are likely to see the largest drop. It is estimated that up to 166,612 California health center patients and 77,332 New York health center patients will stop participating in Medicaid. Other states with the greatest potential Medicaid patient losses include Arizona, Colorado, Florida, Illinois, Massachusetts, Pennsylvania, New Jersey, Texas and Washington. With fewer Medicaid patients, health centers are likely to experience significant reductions in revenue, with total losses ranging from $164 million to $493 million nationally. The loss of revenue would translate to reduced patient and staff capacity. Our estimates show health centers would face diminished capacity, employing 4,669 fewer medical staff and serving 407,000 fewer patients overall.

Implications

The net result is that the public charge rule would cause large numbers of patients to lose Medicaid coverage. Because health centers are required to serve all patients regardless of their ability to pay, those losing Medicaid could still get care as uninsured patients. But the non-profit health centers would lose substantial revenue which would force them to see fewer patients, reduce staffing and/or reduce services. Thus, the reductions in Medicaid coverage for members of immigrant families, caused by the public charge rule, would have broader harmful repercussions for others in their communities.

The loss of Medicaid coverage is also likely to lead to very serious health problems, including premature deaths. Studies show Medicaid expansion is associated with a significant decline in mortality rates. Furthermore, patients who are uninsured tend to have greater health complications and higher mortality rates than those who have insurance coverage.

In 2018, there were approximately 2.6 million patients at health centers with diabetes, 815,000 diagnosed with heart disease, 4.8 million with hypertension and 1.3 million with asthma. While patients who have lost Medicaid can still receive care as uninsured patients at community health centers, they may face much greater challenges getting other needed services, such as specialty care or medications. Thus, for example, an uninsured diabetic patient could receive primary care at the health center, but be unable to afford insulin or other medications or get specialty care from an endocrinologist. Health centers can help screen patients for cancer, but usually must refer patients elsewhere for final diagnosis and treatment, with limited options for those who lack coverage.

Left untreated, both child and adult patients with chronic health conditions risk significant health complications and shorter lifespan. Additionally, the chances of survival are greatly diminished should uninsured patients opt to delay or forgo even primary care. For example, uninsured women are nearly two times more likely to die from cancer due to late diagnosis than their insured counterparts. In 2018, health centers reported nearly 284,000 patients with abnormal breast findings and over 204,000 patients with abnormal cervical findings. Altogether, the public charge rule and its spillover effects pose a serious threat to health care access and the well-being of low-income Americans already at risk of chronic, life-threatening health issues.