Trump’s One Big Beautiful Bill Act Darkens Outlook for Government-Backed Clinics
Bluestem Health, a clinic that serves low-income and uninsured patients in Lincoln, Nebraska, has lost money over the past two years.
And CEO Brad Meyer fears the situation will soon deteriorate for the clinic and its 21,000 patients. Indeed, Nebraska is poised to become the first state to require some Medicaid enrollees to work or lose coverage under new rules in President Donald Trump’s One Big Beautiful Bill Act.
“This will have a huge financial impact on us,” Meyer said. On May 1, seven months before the law requires it, the state will begin imposing work requirements on eligible adults enrolled in Medicaid.
Most of Bluestem’s patients are covered by the government’s program for low-income or disabled people. Meyer estimates that up to 15 percent of them could be excluded from Medicaid, which could cost his center about $600,000 a year. This could mean reductions in services or staff.
Nationwide, about 17,000 federally funded community health centers, like Bluestem, treat 1 in 7 Americans. They are bracing for the fallout from the law Trump signed last year, which could cost nonprofit health centers $32 billion collectively over five years, according to the Commonwealth Fund, a health research organization.
Health centers receive annual federal grants but rely on Medicaid reimbursements for patient care as their largest source of revenue. The government insurance program covered about half of its approximately 33 million patients in 2024.
The Commonwealth estimates that 5.6 million health center patients will lose Medicaid coverage over the next decade as most states adopt work requirements — a provision of the Trump law that requires non-disabled enrollees to work, volunteer or perform another approved activity for at least 80 hours per month.
Most are expected to lose coverage not because they aren’t working, but because of administrative errors, such as failing to document their hours or verify that they qualify for an exemption.
Health center officials say there is no easy way to make up for lost revenue other than reducing staff or services, which would affect all of their patients. The cuts will coincide with an expected surge in patients as people who lose coverage turn to clinics for low-cost care.
By law, health centers are required to treat all patients, regardless of their ability to pay.
A double whammy
Overall, about 10 million fewer Americans will have insurance by 2034, the Congressional Budget Office estimates, both because of the Trump law and the decision by congressional Republicans to cut premium subsidies for Affordable Care Act health plans.
“We are extremely concerned,” said Jeffrey McKee, CEO of Community Health Centers in Burlington, Vermont. Its clinics treat about 35,000 patients a year, nearly a third of whom are covered by Medicaid.
He predicts that an increase in uninsured patients will result in an additional $3 million in lost revenue. This drop in revenue could jeopardize street medicine programs and home care for patients 65 and older, he said.
By 2024, most community health centers lost money due to rising costs and the expiration of Covid pandemic relief funds, according to a KFF analysis.
Centers with high rates of uninsured patients generally struggle more financially, while some centers are supported through private donations.
People without insurance – who made up about 18% of all health center patients in 2024 – pay on a sliding scale. These amounts represent only a fraction of what insurers pay.
The new Medicaid work requirements apply to Washington, D.C. and the 40 states that expanded Medicaid eligibility under the ACA, as well as to adults with incomes up to 138 percent of the federal poverty level, or $22,025 for a single person this year.
Republicans say work requirements will incentivize people to enter the workforce and help preserve Medicaid for children and people who are pregnant or disabled. Studies by KFF and others show that most enrollees already work, go to school, or have a health condition that prevents them from working.
Nebraska is first
The Trump administration approved Nebraska’s early launch of its work requirements program, which could affect about 72,000 Medicaid expansion enrollees. State Medicaid officials say they plan to use state and national databases to check whether people are already working or have an exemption so most don’t have to do anything to maintain their coverage. But thousands of people will have to prove they meet the requirements.
At Bluestem in Lincoln, Meyer worries that many of his Medicaid patients aren’t taking the necessary steps to maintain their coverage.
Angelisa Corum, 57, said she loves the care she has received from her regular doctor at Bluestem Health over the past dozen years, especially in the treatment of breast cancer. “I’m cancer-free and they helped me get through it,” she said.
She said the care was the same when she was covered by her husband’s commercial insurance through her employer and when she was on Medicaid while he wasn’t working.
Work requirements are just one part of Republican law passed last year that could hurt health centers. It also requires more frequent eligibility checks for adults enrolled under the Medicaid expansion, which advocates say could also lead people to lose coverage. Many states now only require eligibility checks once a year.
The law also reduces overall federal Medicaid funding to states, which could prompt them to cut reimbursements to centers and other health providers.
The National Association of Community Health Centers, the clinics’ largest advocacy group, has tried to walk a tightrope, warning of impending cuts to the law, while still working with the Trump administration. The group praised Congress for increasing base funding for health centers in the federal budget approved in January.
Kyu Rhee, CEO of the national association, said the clinics have strong bipartisan support in Washington despite cuts to Medicaid.
He met with Trump administration officials to discuss how health centers can play a role in preventing people from losing coverage due to work demands. He said they can help address other administration priorities, like improving the American diet, expanding primary care and focusing on chronic diseases — although it’s unclear how any of that would lead to more funding.
To further demonstrate the health centers’ reach, the association recently funded a study that found 52 million people visited the clinics over a three-year period. “It shows that we serve many more Americans than we did in a single year,” Rhee said.
Health center officials hope to secure some of the funding for the $50 billion Rural Health Transformation Program included in the GOP-passed law. States will begin spending the first tranche of that money this spring.
Rhee said he is encouraged that states will have technology to help leverage databases to check the work status or health conditions of many enrollees to meet “medical fragility” rules that could help them avoid being disenrolled.
Others are less optimistic.
“Health centers are bracing for a major financial impact,” said Sara Rosenbaum, a professor of health law and policy at George Washington University and a Medicaid expert who co-authored the Commonwealth Fund study. “The way they are coping is the same way health systems usually do, dealing with mass layoffs, site closures and service reductions. »
Amanda Pears Kelly, CEO of Advocates for Community Health, a trade group representing 52 health centers, said health centers also are concerned about rising costs, particularly for prescription drugs. Looming financial challenges will make it more difficult to recruit staff, both in rural areas where doctors and nurses are scarce, and in more populated areas, where competition for workers is more acute, she told KFF Health News.
“The challenge is that health centers are being hit from all sides,” Pears Kelly said.
