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MEDICAID CUTS COULD KILL SAFETY-NET HEALTH CENTERS  
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Maria Esch
August 9, 2026
Jacobin
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_ Federally qualified health centers are an essential source of
medical care for poor and working-class Americans, especially in rural
areas and neighborhoods of color. Medicaid cuts in Donald Trump’s
Big Beautiful Bill could shut them down. _

Medicaid is a primary revenue source for federally qualified health
centers that serve patients who may not otherwise be able to access
health care. Donald Trump’s Medicaid cuts may deal a fatal blow to
these vital safety-net providers. , Tasos Katopodis / Getty Images for
People’s Action Institute

 

If you’ve ever driven through an American city, odds are you have
seen a federally qualified health center (FQHC). FQHCs
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are safety-net medical providers dedicated to providing health
services to people who may not otherwise have access to quality
primary and outpatient care. According to one FQHC nurse, the
facilities function to “fill gaps in our disaster of a health care
system . . .  and to address health disparity and provide health
care to folks who just can’t be part of the capitalist health care
system in America.”

These clinics form the backbone of medical care for uninsured and
underinsured Americans. In California alone, there are approximately
171 FQHCs and forty-three “look-alike” locations that function
similarly but with key differences in their funding sources. In 2024,
California FQHCS
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served nearly six million patients, 30 percent of whom are children,
and the vast majority of whom live below the poverty line. Almost
three-quarters of patients at these facilities received Medicaid
benefits. Millions of Californians who may have otherwise been unable
to receive medical care are supported by FQHCs.

FQHCs are unique compared to other medical facilities, in that they
receive about 9 percent of their funding from a federal 330 grant that
requires clinics to follow a strict set of requirements on who they
serve, how they spend money, and how their governing bodies are
composed. (“Look-alike” clinics do not receive these federal
grants but still serve a similar function to certified FQHCs.) The
other 91 percent of funding for these facilities come from other
sources, namely revenue from medical services provided. Since a
majority of FQHC patients are insured by Medicaid, that program’s
funding is a primary lifeline of these health centers.

Donald Trump’s 2025 One Big Beautiful Bill Act (H.R. 1) proudly
slashed vital Medicaid spending. Because of its passage, the program
will lose almost $800 billion in federal dollars over the next ten
years, and enrollment requirements will be much tighter. Together
these changes are projected to reduce
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Medicaid enrollment by 10.3 million.

These cuts begin a snowball effect. While the bill rips away health
care access for millions of Americans, it also kneecaps health centers
by cutting a major funding stream. According to one FQHC employee:

It would be impossible for most of my patients to get health care
without Medicaid. They’re just barely making it through, and so
having Medicaid allows them to access care. I have no idea what they
would do, how our clinic would survive, how patients would go on
[without it].

From there, the snowball continues downhill. Fewer patients will come
in the door, eating away at the revenue stream from Medicaid. Lower
revenue means closures at rural clinics, and fewer appointments mean
people will need more emergency care when health issues reach a crisis
point. Emergency Departments are required to serve the uninsured, and
with higher volumes hospitals have to eat more of the cost of care.

When hospitals lose funding, emergency departments are forced to
close; nurses and support staff lose their jobs; equipment gets
updated less frequently; wait times are longer; and remaining workers
are stretched even thinner than they already are. Even people who
don’t utilize Medicaid for their own health care will feel the
effects of its budget-slashing.

As of 2024, 79 percent of total functional expenses of California
FQHCs go to program service expenses — things like staffing,
patient care, and other spending used to further their
community-oriented missions. There simply is not enough room in the
budget to eat the enormous cost of lost Medicaid revenue.

So how do FQHCs staunch the bleeding? In California, a solution has
been proposed: the billionaire tax [[link removed]].
So far, this proposal has been endorsed
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by California’s Democratic Party but denounced by Governor Gavin
Newsom.

California faces a loss of roughly $100 billion dollars in Medicaid
funding over the next five years. With this onetime 5 percent tax on
the wealth of Californians worth more than $1 billion, The tax would
raise upward of $100 billion to “replace lost federal dollars and
protect essential services,” as the proposal’s advocates
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these funds will go to filling gaps in the health care budget lost to
the Big Beautiful Bill, and 10 percent will go to food assistance and
K–14 education.

The money taken by a 5 percent wealth tax will barely be missed by the
two hundred individual billionaires living in California, but it would
mean the restoration of medical care for millions of poor and
working-class Californians.

Yet like Newsom, California FQHCs and other health care organizations
are notably opposed to the proposition. The lack of support from FQHCs
themselves is surprising, considering that this measure may be the
only viable solution for keeping their organizations afloat.

Across the country, Trump’s Medicaid cuts are primed to mortally
wound federally qualified health centers and other health care
providers. Unless something is done to fill the funding gap, and fast,
we can expect a grim toll in human well-being and lives.

_xxxxxx MODERATOR -  MORE ABOUT THE PROGRESSIVE GRASSROOTS HISTORY
OF FQHCS __CLICK HERE_
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_MARIA ESCH is a research analyst at Arizona State University’s
Center for Work and Democracy._

_JACOBIN is a leading voice of the American left, offering socialist
perspectives on politics, economics, and culture. The print magazine
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* U.S. history
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* Health Policy
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* Health Care
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* Medicaid
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* Taxation
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* billionaire tax
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* California
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* Gov. Gavin Newsom
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