What Happened to Ensuring Funding for America’s Largest Primary Care System?
The Health Center Program’s Funding Crisis in a Changing Health Care System
Community health centers (CHCs) have a 60-year history of caring for our nation’s most vulnerable populations to ensure that all those in need access primary care services, regardless of their insurance status or ability to pay. This 60-year legacy is built on deep bipartisan support and federal grant funding that is the lifeblood of the Health Center Program. This policy, which started as an experiment, has paid outsized dividends with a return on that funding in the billions for our healthcare system. CHCs have saved money, improved communities, and kept patients, who often have the most complex healthcare needs, healthy year after year.
Despite this, health centers’ remarkable contributions have not been met with greater investment, and, at a time when it is most needed, increased funding has been entirely out of reach.
A combination of medical care inflation, a decrease in supplemental funding streams, and an increase in health center patients has resulted in a decline in funding in inflation-adjusted terms in recent years. In addition, these dollars are increasingly unreliable with repetitive short-term funding patches that equate to barely getting by for the nation’s largest network of primary care providers. This persistent lack of a long-term funding plan has created concerning instability for the program, leading to severe workforce strains and shortages, risk of site closures, reduced services, and a litany of other harmful outcomes that ultimately reduce access to care for those most in need.
How did America’s premier primary care infrastructure, intended to ensure the continuity of care for those who need it most, end up with 50% of providers operating with negative margins?
The Health Center Program receives grant funding in two ways:
30% percent is provided through annual Congressional appropriations, also called discretionary funding, which must be approved by Congress each year.
70% percent is provided through the Community Health Center Fund (CHCF), a mandatory multi-year funding stream launched in 2010 to ensure program stability.
Unfortunately, this Fund, designed to stabilize health centers while a critical source of funding, has not created the stability that health centers hoped for. For the past 18 months, it has been extended for short periods by a series of congressional continuing resolutions, without a multiyear authorization in place, while discretionary funding remains flat. At the same time, the past eight years have brought natural disasters, mental health and substance abuse crises, severe workforce shortages, unprecedented inflation, the erosion of 340B program savings, and a record number of patients seeking primary care. Evenly split between rural and urban communities, the reality and severity of these challenges are impacting health centers in every corner of the nation.
As federal funding struggles to keep pace with rising need for patient access as well as the steadily increasing cost of providing care many of today's CHCs are in imminent danger of reducing services or closing, leaving more than 32 million health center patients at risk of losing access to primary care.
This article briefly examines the state of funding for the federal Health Center Program and how we got to this critical point.
A Brief History of Community Health Center Funding
In 1965, the nation launched the first community health centers as a demonstration project under President Johnson as a part of the War on Poverty. These centers, rooted in the Civil Rights Movement, were established in underserved communities with a powerful mission: to fundamentally transform the health and lives of residents in their communities through an accessible healthcare system.
In 1975, the Health Center Program was authorized as a permanent program under Section 330 of the U.S. Public Health Service Act. President Jimmy Carter called for a significant expansion of CHCs, including the Rural Health Initiative, which at the time, more than doubled the program's funding over four years.
Fast forward to the early 2000s, as CHCs grew to serve 10 million people in communities across the U.S. This was partly due to the Health Center Growth Initiative, led by President George W. Bush. The Bush Initiative called for more than 1,200 new health center sites and service expansions in the areas of mental health, substance abuse, and oral health, and as a result, patient counts nearly doubled for CHCs. During this period, Congress reauthorized the Health Center Program twice, affirming continued and increased investment in this vital program.
Under President Barack Obama’s term in 2009, the American Reinvestment and Recovery Act (ARRA) delivered the single largest investment in health center history, providing $2 billion in direct CHC funding to cover the costs of caring for new patients and the capital expenditures required to support expansion.
The Affordable Care Act (ACA) was enacted in 2010 and established a new source of mandatory funding – the Community Health Center Fund (CHCF), which was implemented in 2011 and provided $11 billion for the Health Center Program over five years. With this new infusion of stability and funding, health centers were able to see an increased number of patients, expand services, and invest dollars back into patient care and communities that needed it most.
Averting Multiple Funding Cliffs and the Rise of New Health Care Crises
In 2015, the Fund was extended for two years, fiscal years 2016 and 2017. In 2018, it was extended for fiscal years 2018 and 2019. Subsequent extensions followed, but funding has never been restored to provide the kind of long-term stability that the initial five-year investment provided. The repetitive need for reauthorization and risk of expiration has been extremely destabilizing operationally and putting patient access at risk with increased anxiety that health center funding will go over the “cliff,” and patient care will be interrupted.
In 2020, COVID-19 hit the U.S., and health centers were at the frontlines. CHCs provided testing, treatment, and vaccines to tens of millions of Americans in their communities. During this crisis, Congress provided vital infusions of resources temporarily across the healthcare system, including grant funding and a freeze on Medicaid enrollment, mitigating coverage losses.
In 2023, these resources began to recede. Supplemental grant funding ended, and Medicaid's continuous enrollment expired on March 31, 2023. This policy change phased down federal Medicaid matching funds and allowed states to disenroll Medicaid recipients. The policy change also increased the number of uninsured people and reduced the CHC revenue needed to support comprehensive care. To be clear, while all of these changes occurred, health centers continued to provide high quality care to all those in need, regardless of insurance status or ability to pay. As the cost of goods and services continued to climb, health centers had no ability to adjust their rates, nor did they receive adjustments to their grants to account for those increased costs. In simple terms, health center continued to fulfil their mission providing care to those in need while suffering sharp reductions in resources and support to deliver that care.
Some progress appeared on the horizon in 2024, with both the House Lower Costs, More Transparency Act (H.R. 5378) and Senate Bipartisan Primary Care and Health Workforce Act (S. 2840) supporting increased health center funding at varying levels. In December 2024, Congressional leadership announced a bill that would have increased the mandatory funding to $4.5 billion in FY 2025 and $4.6 billion in FY 2026. This would have represented a 15% total increase over the most recent CHCF multi-year authorization and had the support of leaders on both sides of the aisle. After the package was released, opposition to provisions in the bill unrelated to CHCs prevented the bill from being enacted. Instead, Congress passed another short-term patch, and on March 14, it passed yet another short-term extension through September 30, 2025. While these months-long extensions have averted going over the funding “cliff”, they have been extremely harmful to health center operations, services, and solvency. As community-owned and operated non-profits, a lack of financial reliability beyond 6 to 9 months for years on end is unsustainable.
Today’s Reality and Looking Forward
Since 2012, CHCs have seen a 45% increase in the number of people seeking care, and they’ve expanded their services to more than 15,000 locations to meet rising demand, but as outlined above, serious hazards are both present and on the horizon.
Advocates for Community Health (ACH)’s CHC Invest campaign calls on Congressional leaders to not only increase immediate funding for health centers to $9 billion this year, but also to scale investments in health center infrastructure, workforce, and innovation over the next five years to reach a total of $30 billion by 2030. This historic investment will ensure community health centers can fulfill their mission of providing services to critically underserved populations in all corners of the nation.
In addition to more than three years of consistent advocacy on Capitol Hill, ACH delivered a letter from more than 550 national, state, and local organizations urging Congress to increase funding for community health centers through the Community Health Center Fund reauthorization.
CHCs are the nation’s largest network of primary care providers, evenly split between rural and urban communities in every state and territory in the US, providing the highest quality of care when compared with both public and private providers. They are among the largest employers in many of the communities they serve, helping to support local economies and ensure improved health outcomes for their patients so they can work and thrive in those communities. However, health centers continued to face major challenges in serving a patient population that is not only much more likely to be uninsured but also at higher risk for more complex health and social challenges than seen in other primary practice settings.
At a time when the nation is focused on health and healing, on a healthier population that will carry our nation forward, now is the time to make a concerted investment in the foundation of achieving that greater vision of health. This greater vision and mission hinges on the Health Center Program serving as the foundation, from cradle to grave, to care for all those in need and to drive the health of our nation for the better.
Continued advocacy is essential. For more information, please contact ACH at info@advocatesforcommunityhealth.org.