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Proposed Medicaid Policy Changes Threaten Behavioral Health Care Access at Community Health Centers

woman at desk with paperwork helps another women

Marcela Parra, a navigator at Epiphany Community Health Outreach Services (ECHOS) in Houston, helps a customer fill out paperwork. When patients lose Medicaid, health centers and their communities — particularly in rural areas — are put at risk. Photo: Marie D. De Jesus/Houston Chronicle via Getty Images

Marcela Parra, a navigator at Epiphany Community Health Outreach Services (ECHOS) in Houston, helps a customer fill out paperwork. When patients lose Medicaid, health centers and their communities — particularly in rural areas — are put at risk. Photo: Marie D. De Jesus/Houston Chronicle via Getty Images

Authors
  • Headshot of Peter Shin
    Peter Shin

    Chief Science Officer, National Association of Community Health Centers

  • Headshot of Erin Prendergast
    Erin Prendergast

    Deputy Director, Federal Policy, National Association of Community Health Centers

Authors
  • Headshot of Peter Shin
    Peter Shin

    Chief Science Officer, National Association of Community Health Centers

  • Headshot of Erin Prendergast
    Erin Prendergast

    Deputy Director, Federal Policy, National Association of Community Health Centers

Toplines
  • Community health centers play a leading role in integrating behavioral health with primary care services for high-risk populations, and their ability to maintain these services depends on continuous coverage and stable funding

  • Medicaid work requirements and more frequent eligibility redeterminations risk destabilizing behavioral health care access at community health centers

Community health centers (CHCs) serve as a lifeline for millions seeking primary and behavioral health care. In 2023, 32.5 million patients relied on CHCs, many receiving mental health and substance use disorder (SUD) services that improve outcomes and reduce costs. Yet, emerging Medicaid policy proposals, including work requirements and more frequent redeterminations, risk destabilizing this vital infrastructure.

Behavioral health integration is a proven model that embeds mental health and SUD services with primary care. In 2023, CHCs reported more than 43.5 million visits for mental health and substance use disorders, reflecting a 54 percent increase since 2018. Integrated care teams within CHCs coordinate these services, which can reduce emergency visits, help patients manage their chronic conditions, and lower overall Medicaid spending. These benefits depend on uninterrupted Medicaid coverage and predictable funding.

Work requirements pose a direct threat to patients who need care most. Among CHC patients with conditions like depression, anxiety, panic disorder, and bipolar disorder, the majority are covered by Medicaid. Behavioral health conditions can hinder individuals from maintaining a job or they could experience stigma due to a diagnosis or have a criminal record that could jeopardize employment. Tying coverage to work reporting ignores these realities and puts patients at risk of losing access to care when they need it most.

The Congressional Budget Office estimates that under the House bill (H.R. 1), at least 7.8 million Medicaid enrollees nationwide would lose coverage due to federal work requirements and more frequent eligibility verifications. For CHCs specifically, researchers estimate between 2.8 million and 5.6 million people are at risk of losing Medicaid coverage. Most of these losses would not result from ineligibility but from procedural red tape, reporting burdens, or technology failures. When Arkansas and Georgia introduced work requirements, many enrollees lost Medicaid coverage due to paperwork or administrative confusion.

During the Medicaid unwinding (i.e., the process in which states reviewed eligibility for millions of individuals who had remained continuously enrolled in Medicaid under pandemic-era protections), CHCs experienced similar trends. National data show that 69 percent of disenrollments occurred because of procedural reasons, not changes in eligibility. Many of the people affected had mental health and SUD issues. Such disruptions force patients to halt behavioral health treatment abruptly, worsening outcomes and increasing reliance on emergency care. One year after the Medicaid unwinding, community health centers reported significant staff reductions and service cuts.

Proposed Medicaid Policy Changes Threaten Behavioral Health Care Access at Community Health Centers: Exhibit 1

These financial consequences are not limited to Medicaid patients. Medicaid accounts for 42 percent of CHC revenue and is essential for sustaining integrated behavioral health teams. When that revenue declines, centers are forced to reduce services, cut programs, and lay off staff. CHCs are already under severe financial strain due to chronic underfunding. Further losses in Medicaid revenue will make it harder for them to meet the rising demand for mental health and SUD services. The risks are high: a national study found that when a county loses access to a CHC, mortality rises.

Community health centers play a leading role in integrating behavioral health with primary care for high-risk populations. Their ability to maintain and expand these services depends on continuous coverage and stable funding. Medicaid policies like work requirements and frequent redeterminations risk cutting off care for those who need it most. The result is preventable harm, higher health care costs, and worsening health across entire communities. Policymakers should prioritize coverage stability to protect access and avoid creating barriers to behavioral health care.

Publication Details

Date

Contact

Peter Shin, Chief Science Officer, National Association of Community Health Centers

Citation

Peter Shin and Erin Prendergast, “Proposed Medicaid Policy Changes Threaten Behavioral Health Care Access at Community Health Centers,” To the Point (blog), Commonwealth Fund, July 2, 2025. https://doi.org/10.26099/W8GH-GZ95