Community Health Centers Face Financial Strain From ACA Enrollees

Many individuals who enrolled in bronze exchange plans -- which come with high out-of-pocket costs -- have been unable to pay for care at community health centers, which is putting a strain on CHCs' finances, Modern Healthcare reports.

Background

There are about 9,000 CHC facilities that offer care to about 22 million U.S. residents, according to Modern Healthcare. CHCs receive federal funding and are not allowed to refuse care to patients if they are unable to pay. About 20% of the 7.3 million individuals who purchased coverage through the Affordable Care Act's insurance exchanged enrolled in bronze plans, which tend to have low premiums but higher out-of-pocket costs, including coinsurance, copayments and deductibles of up to $5,500 per person. In addition, individuals enrolled in bronze plans do not qualify for federal cost-sharing subsidies, which are available to those with silver plans.

Financial Challenges for CHCs

Although CHCs bill insurers for the care underinsured individuals receive, many claims are denied, Modern Healthcare reports.

As a result, Community Health Centers of Arkansas CEO Mary Leath said that CHCs' uncompensated-care costs "are not declining as rapidly as contemplated by some policymakers."

Such individuals "are essentially uninsured as far as the (community health center) is concerned," Community Health Center Association of Connecticut Director of Government Affairs Deb Polun said. Texas Association of Community Health Centers Executive Director José Camacho described it as CHCs "subsidizing" the bronze plans.

HHS Provides Clarity on Means-Tested Rates

Some CHCs have begun charging patients fees based on a means-tested sliding scale. According to Modern Healthcare, it previously was unclear whether CHCs had the authority to individuals with private coverage even reduced fees for care. However, HHS on Monday released guidance stating that CHCs could offer means-tested fees to individuals with incomes below 200% of the federal poverty level.

Need for More Consumer Education

Boston University School of Management Health Policy and Management Professor Stephen Davidson said more consumer education efforts are needed in advance of the upcoming open enrollment period to inform low-income individuals of selecting health plans with lower premiums but higher out-of-pocket costs. He added, "Something to watch in the new benefit year is the extent to which those folks switch plans" (Dickson, Modern Healthcare, 9/25).