Medicaid Coverage and Enrollment
The bill adds new hurdles for Medicaid, especially the expansion population (adults up to 138% of poverty). Starting January 2027, states must require most expansion adults to meet work or community engagement requirements (80 hours per month) or lose Medicaid. Parents with dependents 14 years or younger are exempt from the work requirement. States will also redetermine eligibility every 6 months instead of annually. These changes are expected to reduce enrollment – one estimate forecasts over 4 million fewer Medicaid enrollees nationwide under the work mandate. Because FQHCs’ patients are heavily represented among Medicaid expansion enrollees, many clinics can expect more uninsured patients and enrollment churn.
Cost-Sharing
Starting in October 2028, the law imposes up to $35 copays per service for expansion adults (100–138% FPL). However, FQHC and rural health clinic services are explicitly exempt from these cost-sharing requirements. In practice, this means patients receiving care at FQHCs will not be subject to the new copays, though they may still apply for other services such as specialty care.
Eligibility Restrictions
The bill narrows Medicaid eligibility for many immigrants. Refugees, asylees, and other “humanitarian entrants” can no longer get full Medicaid coverage. This will likely reduce coverage for some patients served by FQHCs, since many centers care for immigrant and refugee families. FQHCs should assess their patient mix and plan for language and eligibility assistance programs as states implement these rules.
Other Medicaid Financing Changes
The law eliminates certain state “provider taxes” that many states use to pull down extra federal matching funds. For example, expansion states’ safe-harbor tax rate drops from 6% to 3.5% by 2034. While this primarily affects state budgets (often targeted at hospitals), any reduction in state Medicaid funding can cascade to FQHCs through slower payment rates or fewer state-funded programs. Notably, the law does not cut FQHC-specific funding: existing Medicaid reimbursement for FQHC services and the 330 grant funding mechanism remain intact.
Marketplace Subsidies and Coverage
The law lets the enhanced ACA marketplace tax credits expire at the end of 2025. An estimated 5 million people will lose premium subsidies as a result. In states that expanded Medicaid, some of these people might turn to FQHCs for care as they become uninsured.
New Rural Health Transformation Program
A major new program may benefit FQHCs in rural areas. The law authorizes billions to strengthen rural providers, including FQHCs. According to the enacted language, states can compete for up to $10 billion per year (2026–2030) in “Rural Health Transformation” grants. Funds can support evidence-based preventive care, chronic disease management, workforce recruitment, and facility upgrades. FQHCs are explicitly included as eligible “rural health facilities” under this program. While this won’t offset all losses, it offers a new source of funding for rural clinics if their states apply by the deadlines.
Protective Exemptions
Importantly for FQHCs, the final law exempts FQHC services from several new burdens. As noted, expansion patients pay no new copays for FQHC visits. And the bill does not reduce the federal match rate for FQHCs or “expansion population” services across-the-board. In other words, core Medicaid support for FQHCs remains protected. Advocates won a key exemption that was absent in the House bill: FQHCs can continue to get full Medicaid payment for their services without new patient fees.
Projected Impact on FQHCs
National health center leaders warn that, despite these protections, FQHCs will feel stress. Millions of Community Health Center (CHC) patients rely on Medicaid. For example, CHCs serve over 16 million Medicaid patients nationwide. Projections suggest up to 4M CHC patients could lose coverage. FQHCs should prepare for an increase in uncompensated care and uninsured visits. At the same time, some centers may access new rural funding (if eligible) and should continue highlighting to policymakers that FQHCs are vital safety-net providers.
State Choices Matter
Many outcomes will depend on state implementation. States can delay or soften enforcement of work requirements (CMS may allow a 2-year delay for states making good faith efforts). States will also decide whether to expand Medicaid . FQHCs should engage state Medicaid agencies and legislators to minimize harm, for instance, advocating for broad exemptions (e.g. caring for parents or young children) and adequate enrollment outreach.
