A “month-to-month game of survival”
As Medicaid shrinks, it hurts the financial stability of clinics for the poor
Appointment cancellations and financial distress have become a constant at Bethesda Pediatrics, a nonprofit medical clinic in East Texas that is heavily dependent on Medicaid, the health insurance program for the poor.
On a recent Monday, the mother of a toddler who had a primary care appointment broke down in tears after learning the child had just lost Medicaid coverage, wondering how she could pay the bill.
Another mother told Dr. Danny Price, the clinic’s lead pediatrician, that she was afraid to get her child a flu shot because of the $8 fee she would have to pay now that the child had been dropped from Medicaid.
A child with depression did not show up — most likely, Price presumed, because of having lost Medicaid coverage.
The uncertainty and panic at the clinic, tucked inconspicuously in a poor residential pocket of Tyler, Texas, highlight a little-examined consequence of the vast trimming of the Medicaid rolls since a policy that banned states from kicking anyone out of the program during the pandemic ended last spring. The loss of coverage has not only affected families but is also threatening the financial stability of vital components of the American safety net.
Medicaid payments are “the lifeblood of our health centers and their ability to serve,” said Dr. Kyu Rhee, the president and CEO of the National Association of Community Health Centers, which treat roughly 1 in 11 people in the United States and rely on Medicaid and federal grants to provide a financial cushion for the uncompensated care they give uninsured patients.
Since last spring, Medicaid enrollment has dropped by almost 10 million, including around 4 million children, according to researchers at Georgetown University. States have removed people for a variety of reasons, including for changes in income and age. Some people have been dropped because they did not return paperwork. Others have lost coverage because of technical errors, including computer glitches.
The loss of reimbursements for millions of patients has contributed to an already difficult financial picture for facilities that treat the poor: Unless Congress reaches a funding agreement, nearly $6 billion for federally financed health clinics, which serve more than 30 million people, most of them lowincome, could lapse in March.
Those health centers have each seen revenue losses of at least $500,000 because of the Medicaid unwinding, according to Amy Simmons Farber, a spokesperson for the health center association.
By the end of December, Family Health Centers, a network of clinics in Louisville, Ky., had lost more than 2,000 Medicaid patients since the policy change took effect in April, an almost 6% decline, said Melissa Mather, a spokesperson for the clinic. For every percent decline in Medicaid patient visits, she said, the clinic experiences a revenue decline of $175,000 to $200,000.
Bethesda is now engaged in a “month-to-month game of survival,” said Amber Greene, Bethesda’s operations manager, who also works as a nurse. Standing in a supply closet to make her point, she gestured to a modest stash of Tylenol, Motrin and thermometers, which the church next door had donated.
The clinic, with the vast majority of its patients on Medicaid, needs roughly $115,000 each month to operate its medical and dental clinics but still runs a monthly deficit of around $10,000. Sometimes the costs it eats are small, such as the fee for the shot Price administered to the mother who could not pay. But they add up, forcing the clinic to get creative to preserve funds. A local pharmacy offers substantially discounted antibiotics, and the clinic cut the costs of its virus tests by conducting them in-house.
Texas health officials have defended the unwinding as a natural reversion to Medicaid’s intended shape and size. Conservative health policy experts have also argued that shrinking the rolls is important to sustaining the program financially.
“The reality is that many health professionals cannot sustainably see Medicaid patients because the program reimburses so little, and the claims process is so excruciating, many providers end up taking losses to the point it threatens closure,” said Tanner Aliff, a health policy expert at the conservative Texas Public Policy Foundation.
Roughly one-third to a half of the those on track to lose Medicaid could remain uninsured, according to Dr. Benjamin Sommers, a health economist at Harvard and former Biden administration official who has researched state data on Medicaid losses. Some clinics will continue to provide care for some of those people and absorb the costs. But there is a limit to how much they can sustain financially.
The costs have been passed on to insurers and patients of all types, increasing out-of-pocket payments for everything from emergency room visits to hospital stays to routine doctor appointments, according to data from Epic Research.
Texas has been the nation’s chief Medicaid dismantler. More than 2 million people in the state have been removed from the program, according to recent state data — the highest total nationwide. Around two-thirds of those removed have been children.
Around half of Bethesda’s appointment slots were empty mid-month, Price said Feb. 22, prompting a new phase of desperation in which clinic staff members have discussed how to preserve care for families they have long had relationships with.
“This is going to be a long-term process of convincing those who are not going to have insurance that it’s still worth coming in,” he said.
Across the state at Hendrick Health, a nonprofit hospital in Abilene, Texas, Medicaid revenue was down roughly 30% late last year compared to the same time the year before, according to Jeremy Walker, the hospital’s chief financial officer. The slide has hurt the resources of the hospital, he said, noting that it needs Medicaid patients to preserve its federally sponsored drug discount program.
“The populations they have to deal with are often very challenging, chronically ill and expensive. And the reimbursement is not very good. That’s always the challenge,” said Timothy Mcbride, a health economist at Washington University in St. Louis.
The coverage losses are happening at an especially precarious time. Winter viruses are still circulating. Children are increasingly in need of behavioral health services, childhood vaccines and routine care for conditions such as diabetes and asthma, which commonly afflict lowincome Americans.
Jessica Tucker, a single mother, broke into tears after receiving a $90 bill for her 3-year-old son Raylan’s primary care visit and tetanus vaccine at Bethesda, pleading with her mother by phone for help paying it. That morning, she had been informed that the toddler had been denied Medicaid coverage.
“I didn’t know what to do,” said Tucker, who earns $10 per hour in a parttime job as a customer service associate, recounting the ordeal from her home in Gun Barrel City. She recently received a bill of almost $8,000 for an emergency room visit Raylan had after losing Medicaid, she said. His diagnosis: strep throat.
Bethesda has held onto the medical bills of some patients with the expectation that their Medicaid coverage will be restored. But longer gaps between payments can further strain operations. Bethesda recently lost a behavioral health counselor and is searching for grant funds to cover a new one.
To stay financially afloat, the clinic works to see as many patients as possible. Price can handle about 25 patients in a day, but often they require more attention than the allotted appointment time to address the complexity of some children’s health conditions. He frequently spends the extra time with them despite not receiving more in Medicaid reimbursement.
Bethesda’s status as a nonprofit means that it relies heavily on private donors. A church next door that has long sponsored Price and the clinic recently decided to give up its food pantry and some of its administrative staff to preserve funding for the medical operations, he said.
Price added that some potential donors to Bethesda were religious conservatives who might otherwise have hostile views of Medicaid. When he speaks at fundraisers, he sometimes meets skepticism about the program.
“If they’ve lived their whole lives affluent, they don’t understand the need for clinics, for Medicaid,” Price said.
The complicated attitudes toward Medicaid show up regularly at the clinic. Many parents of patients said that they felt judged or shamed by family members who see government-subsidized health benefits as unseemly.
Destiny Sage, a Medicaid recipient from rural Chandler, Texas, said her mother did not believe in government benefits.
“She didn’t want me getting Medicaid,” said Sage, who brought her stepson, a Medicaid recipient, for an ADHD checkup with Price. A different son had just lost Medicaid coverage, making her nervous about unaffordable medical bills after she spent the little money she had on a water heater.
In many places, Medicaid providers are among the few health care facilities that will accept any patient who walks through the door. A hospital near Bethesda warns with a large sign in all capital letters that it takes only patients who are commercially insured.
People with Medicaid said that the coverage was helping to keep their lives from catastrophe and feared what would happen if it is taken away.
Cherokee Winchell, an elementary school lunch lady, spoke with Price about her 7-year-old son needing his tonsils removed, and about how his ADHD medication needed reconfiguring. Medicaid was holding her family together, she said, including by covering her son’s weekly occupational therapy sessions. But she dreaded losing their coverage and further straining the family’s already precarious finances. She was struggling to buy groceries, relying on Hamburger Helper and Salisbury steak.
Jessica Mcelroy arrived at Bethesda on a recent morning with her 3-yearold son, who still has Medicaid coverage, anxious about a possible autism diagnosis. She beamed as she told Price that he had the social skills of an adult, shaking hands with people he meets and standing upright with his hand over his heart during renditions of the national anthem at football games. But he was struggling to communicate, she said. He recoiled at loud noises, including in movies.
Price reassured her. “The more brilliant ones are the harder ones to make spectrum diagnoses for because they stay a step ahead of us,” he said.
Still, Price and Mcelroy worried about the two trips to a Medicaid-accepting autism specialist she was referred to an hour’s drive away. She said she worried about losing his Medicaid coverage altogether.
Mcelroy said that the specialist told her to look for other options; there were no available Medicaid providers for an evaluation or a speech therapist.
She has settled for a different strategy to help her son, she said: speech therapy tutorials on Youtube.