Support Virginia Communities by Supporting Health Safety Net Facilities

Everyone deserves access to quality, affordable health care services — no matter how much money is in their wallet. Across Virginia, health safety net facilities offer a lifeline, often serving people regardless of their ability to pay and acting as the only affordable option for uninsured and underinsured communities. 

Changes at the federal level will place additional pressure on this system in the coming months and years. Provisions in the federal H.R. 1 bill will reshape Virginia’s health coverage landscape, including taking away Medicaid coverage from over 260,000 people. As more people go without coverage, safety net facilities will receive less Medicaid funding while the demand for services will increase. People who lose their insurance may put off care due to cost and end up in hospital emergency departments, which will ultimately increase state costs for uncompensated care and worsen health outcomes.

Virginia’s safety net system — including Federally Qualified Health Centers (FQHCs) and Free and Charitable Clinics (FCCs) — plays a central role in keeping communities healthy and reducing long-term costs. Understanding how these facilities operate, who they serve, and how changes in coverage affect them clarifies the stakes for patient health and provides important context for policy and state budget decisions.

What Are Health Safety Net Facilities? 

Virginia’s health safety net system relies heavily on Federally Qualified Health Centers (FQHCs) and Free and Charitable Clinics, among other safety net providers. These facilities provide primary and preventive care to people in rural and urban communities where accessing care is more difficult due to cost, distance, and provider shortages — regardless of their ability to pay. 

The Black Panther Party (BPP) established free medical clinics in communities across the country, believing access to health care to be an issue of social justice for the Black community. They also called on the government to provide free and accessible health facilities. In the 1960s, advocacy by the BPP and other health activists led to the creation of  Neighborhood Health Centers (NHCs) under Lyndon B. Johnson’s War on Poverty.  FQHCs are the descendant of NHCs, and maintained the goal of providing community-based care. 

In tandem, clinics that also prioritized various other marginalized groups emerged throughout the U.S. in the 60s and 70s. This includes Virginia’s first free clinic, the Fan Free Clinic, which opened in Richmond in 1970. The modern-day free clinic movement, as established by the National Association of Free and Charitable Clinics in 2001, is often traced back to 1967, when free clinics throughout North America began organizing.  

While sharing similar goals with FQHCs, free clinics remain largely volunteer-led.

Who Safety Net Facilities Serve

Everyone in Virginia deserves access to quality health care regardless of health insurance status, preferred language, race, or ethnicity. Safety net facilities help to remove barriers to care for diverse communities across the commonwealth.

At Virginia’s Federally Qualified Health Centers (FQHCs):

• About 20% of patients do not have health insurance
• 36% are covered by Medicaid/CHIP or other public insurance
• About 90% are people with low incomes
• About 23% are best served with language assistance

FQHCs in urban areas of the state tend to be better staffed, as rural regions are less likely to have an adequate number of primary care physicians. As a result, although facilities are distributed throughout the state, people in Southwest Virginia are less likely to have access to the care they need. 

While less than half of Virginia’s more than 70 Free and Charitable Clinics (FCCs) accept Medicaid, they all serve a similar role for communities. In 2024, they served 113,023 patients across the commonwealth, including:

• 72,526 people without insurance,
• 10,632 people with inadequate coverage, and 
• 29,865 people who had Medicaid coverage 

This data underscores the critical role that safety net facilities play in providing care for those who are excluded from or priced out of health insurance.

How Federally Qualified Health Centers (FQHCs) are Funded

To qualify as an FQHC by the Health Resources and Services Administration (HRSA), centers must meet strict federal standards for the quality of care they provide and how they report services. Funding for Community Health Centers (CHCs) comes from several sources, including Medicaid, private insurance, self-pay, and federal grants.

Medicaid is the largest and most stable revenue stream, accounting for 32% of funding for Virginia’s Community Health Centers. Clinics are paid a set amount for each patient visit, rather than billing separately for each test or service. In Virginia, most Medicaid patients are covered by a private insurance plan that administers Medicaid benefits, known as a Managed Care Organization (MCO). If the plan pays less than the required visit amount, the state pays the remaining balance, also known as a “wraparound” payment.

This structure helps keep FQHCs financially stable so they can continue serving patients who might otherwise lose access to care. When Medicaid enrollment drops, clinics continue treating many of the same patients but no longer receive the full payment tied to those visits, reducing operating revenue.

Recent federal funding changes and the expiration of COVID-19 era support have already led to difficult staffing and budget decisions, increasing the financial strain on already overburdened safety net providers. This leaves little flexibility to take on additional patients and will make it difficult for them to pay their staff and keep their doors open, let alone improve the care they provide.

How Virginia Free and Charitable Clinics Operate

Free and Charitable Clinics (FCCs) operate differently. They are 501(c)(3) organizations, primarily funded by private donations and grants, and often rely on volunteer providers. Clinics are staff-led and largely funded through private donations and grants, and patients typically receive services at no cost or pay a small sliding-scale fee.

When people are left uninsured and their health gets critical, many turn to free clinics, who often maintain long waiting lists, or resort to emergency departments to receive care.

Federal Impacts on Patients, Providers, and the State

Federal policy changes are expected to reduce health coverage in Virginia:

• About 100,000 people will be priced out of Marketplace coverage, due to the expiration of enhanced federal ACA subsidies  
• Roughly 260,000 Virginians are at risk of losing Medicaid coverage due to changes caused by H.R. 1.

For safety net providers, federal policy changes pose two challenges at the same time: less funding and more patients.

Community health centers, including FQHCs, would receive less Medicaid funding while continuing to treat many of the same individuals. Free and Charitable Clinics would see increased demand from newly uninsured residents, stretching already limited capacity. This could lead to longer wait times, reduced services, and staffing challenges. 

The Virginia Association of Free and Charitable Clinics reported a 38% increase in uninsured patients at free and state-funded clinics over the past three years. This illustrates how coverage changes affect not only individual facilities but the broader health safety net.

As access becomes harder, people are more likely to delay treatment until conditions worsen. Care then shifts to emergency departments — where the cost of treatment is more expensive and frequently not compensated, increasing costs for the state and across the system. Ultimately, this moves us further away from what we should all be working toward: a commonwealth where everyone has access to the care they need to be healthy.

An Opportunity to Invest in Virginia’s Health Safety Net

Investing in affordable health care means investing in Virginia’s health safety net facilities. Organizations such as the Virginia Association of Free and Charitable Clinics (VAFCC) and the Virginia Community Healthcare Association (VCHA) are leading efforts during Virginia’s 2026 legislative session to ensure these facilities can continue to serve our communities. 

Lawmakers have been considering several budget amendments to increase state funding for the health safety net. Proposed amendments introduced by Del. Herring (Item 282 #3h) and Sen. Locke (Item 282 #3s) would have increased funding for FQHCs by about $21 million over two years. These increases were regrettably not included in the House or Senate budget proposals. 

Fortunately, amendments introduced by Del. Willett and Sen. Locke to increase funding for Virginia’s Free and Charitable Health Clinics by $10 million were included in both the House (Item 282 #2h) and Senate (Item 290 #1s) budget proposals. As budget conferees begin to determine a compromise proposal, it is imperative that this funding remains in the final budget.   

As federal policy changes affect coverage, Virginia families and the safety net facilities that serve them will feel the consequences. Many families are making difficult decisions when budgeting for their health care, and their realities should inform the decisions our state lawmakers make when budgeting for the health and well-being of people across our commonwealth.

Category:
Health Care