When Coverage Disappears, Community Health Clinics Pay the Price
Why are many Tennesseans uninsured?
By 2034, nearly 300,000 Tennesseans are projected to lose their health insurance. This includes 225,000 who no longer qualify for premium tax credits, which are the federal health subsidies that defray the cost of coverage under the Affordable Care Act. Nearly 70,000 more are expected to lose Medicaid, known as TennCare in Tennessee. These substantial coverage losses are largely driven by H.R. 1 signed into law on July 4, 2025, which reduces federal Medicaid funding by $1 trillion over the next decade.
Further losses are occurring because those who remain eligible for premium tax credits have seen the amount of those credits drop sharply since Congress refused to extend them beyond the end of 2025. The resulting cost increase has forced thousands of Tennesseans to drop their health insurance. In addition, Tennessee is one of only ten states that has not expanded Medicaid under the Affordable Care Act. As a result, 280,000 working Tennesseans were ineligible even before last year’s federal funding cuts went into effect, and they remain ineligible today.
Note: Tennessee's name for Medicaid is TennCare. TennCare is Medicaid.
How do Community Health Centers help?
Community Health Centers (CHCs), also known as Federally Qualified Health Centers (FQHCs), have quietly become the backbone of healthcare access for Tennessee's most vulnerable communities. These clinics play a critical role in reducing disparities for medically underserved populations, providing high quality, and cost-effective care in urban and rural areas. Regardless of a patient’s income or insurance status, they offer primary and preventative care on a sliding fee scale. In Tennessee, there are 30 centers operating 220 delivery sites, and about 100 of these sites are located in rural areas. These clinics are preparing to see a surge in demand as more Tennesseans are in need of affordable healthcare.
Why are Community Health Centers at risk?
Since CHCs continue to care for patients despite their ability to pay, most clinics operate with fragile budgets. When the uninsured population increases, clinics are not adequately reimbursed, and they experience more uncompensated care. Community health centers rely heavily on Medicaid payments, which average 42% of their revenue. In other words, when more patients are insured with TennCare, rather than uninsured, it benefits both the clinic and patients. In comparison, private healthcare providers generally have some leeway to increase their prices, turn away patients, or offset revenue losses through private insurance. Community health centers do not have those options, making them especially vulnerable to negative financial margins. This surge in demand could result in clinic closures, job losses, scaling back services, and longer wait times, especially in rural communities where there are limited options. The National Association of Community Health Centers estimates that the passage of H.R. 1 could lead to 34,000 job losses and 1,800 clinic closures nationally.
Neighborhood Health is one of the most prominent community health centers in Middle Tennessee. They currently have 12 clinics, serve over 31,000 people, and provide 90,000 visits annually. CEO of Neighborhood Health, Brian Haile, shares his concerns about the rising demand for care, “We are really struggling to figure out how we can help meet the need when there is no new federal funding to hire more doctors to provide the care that many of these newly uninsured people will need,” he said. “It’s a real conundrum.”
These policy changes have created the perfect storm for community health centers, straining their limited resources while not providing any new funding to offset the rise in uninsured Americans. If these trends continue, access to safety net care will erode, and the burden will fall hardest on the thousands of Tennesseans who depend on their services. These clinics should not be left to absorb the consequences of broader policy failures, nor do they have the capacity to do so. If community health centers close, so does one of the last buffers protecting patients from rising healthcare costs.
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