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SCG Analysis: SB 97 – Grants to Community Clinics

Publication date: 
Tuesday, July 25, 2017

On July 10, Governor Jerry Brown signed a budget-related bill, Senate Bill (SB) 97, which included $20 million in grants to support clinics that may be adversely affected by reduced federal assistance. The Community Clinic Lifeline Grant Program will fund the operational costs of nonprofit, small, or rural health centers in critical service areas.

Background

Congressional attempts to repeal the Affordable Care Act (ACA) include potential cuts to federal funding for Medicaid. An analysis from the Congressional Budget Office projects that the American Health Care Act, passed by the House in May, would reduce federal spending on Medicaid by $834 billion over 10 years. If federal funding for Medicaid is reduced, clinics that primarily serve patients covered by the health program would face financial pressure.

California has 1,237 licensed community health centers, which serve 1 out of 7 Californians, 62 percent of whom are women, and 32 percent of patients are children. Because community health centers provide care for everyone regardless of their ability to pay, they also serve 30 percent of the state’s 14 million Medi-Cal beneficiaries (the state’s system of Medicaid). Most clinics are located in either inner-city or isolated, rural communities and are the only source of care for low-income residents. Under the ACA, Medi-Cal eligibility expanded in 2014. Community health centers saw a 63 percent increase in the number of Medi-Cal insured patients. Subsequently, many small clinics grew to accommodate more patients.

Ampla Health in California runs fourteen clinics in small, rural communities like Colusa or Arbuckle. The Ampla Health system relies on federal funding to serve approximately 70,000 patients annually. Fifty thousand of these patients are Medi-Cal or Medicare beneficiaries.

Planned Parenthood also relies on federal funding to provide reproductive health services to low-income patients. Last year, Planned Parenthood saw over 850,000 patients, with 80 percent of their patients receiving Medi-Cal insurance. Planned Parenthood Los Angeles served 242,000 patients alone last year. The organization faces threats to federal funding because it provides abortion services. It recently reduced services in some locations and closed three of its clinics in Vacaville, Pittsburg, and Richmond.   

Existing State Law

Existing state law authorizes the California Health Facilities Authority to make one-time grants to participating health clinics for expenses like land, construction, or remodeling purchases.

Proposed Solution: Provide Stop-Gap for Clinics at Risk

SB 97 establishes The Community Clinic Lifeline Grant Program to provide $20 million to health clinics that would be greatly affected by reduced federal funding. The program is intended to help these clinics while they find more durable funding. Specifically, this bill authorizes the Office of the State Treasurer to use the existing loan program for health facilities to award one-time, three-year grants to support core operating costs for clinics. The maximum amount per grant is $250,000.

Eligible clinics include small or rural primary care health clinics. Licensed nonprofit clinics must amass less than $100,000 in annual income. Clinics operated by a district hospital or health care district are also eligible. The State Treasurer’s Office is responsible for developing selection criteria for awarding grants. The Office may consider the risk of reduced services in the event of federal action, and the extent the grant will contribute toward continuation of health care access to underserved populations.

Application guidelines will be available before January 2018.  Grants are to be rewarded regardless of federal action. At this time, no other state is developing a similar grant program.

Support: Grant Program Ensures the State’s Safety Net

Community Health Clinics and California Healthcare Advocates are known supporters of establishing The Community Clinic Lifeline Grant Program. They view this legislation as essential to maintaining access to health care for the state’s most vulnerable populations and underserved areas. SB 97 allows for short-term financial stability while clinics develop more long-term sustainable financial plans that include various avenues of revenue. Supporters also note that a loss of federal funding could mean a loss of over 27,000 jobs in the state’s health centers. It could also accumulate to a $3.5 billion cost in California’s health care system due to patients delaying care and visiting emergency rooms for primary care.

Opposition: Grant Program is Presumptive, Allows for only Planned Parenthood Funding

No known opposition at this time. Opponents note that a reduction in federal funding remains uncertain. In addition, some opponents believe that the program can be designed to only fund Planned Parenthood Clinics. Planned Parenthood faces scrutiny for providing abortion services. Note, existing law prohibits public funds for abortion services.

 

SCG’s Staff members Bethanie Milteer and Alex Atienzo contributed to this analysis.

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