Your Money: How the financial adviser’s role has evolved

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Bruce Helmer and Peg Webb

The business of giving financial advice has changed dramatically over the past 30 to 40 years. When we started, the relationship was mostly transactional: Investors came to you to help them pick stocks and manage portfolios. At most firms, the emphasis was on “beating the market” and finding the next “hot stock.” Financial planning was nowhere to be found.

Most advisers today offer a new, distinctly different model for client engagement — one that consolidates every piece of an investor’s financial life into one place so that it can be managed more holistically.

The evolution

It may help to understand how far the industry has come since the 1970s and 1980s.

Older investors may have worked with stockbrokers in the past to help manage their money. This was a very different world. In the old days, the emphasis at most brokerage firms was on salesmanship and returns. Goals were very much directed to a future point in time — setting retirement at 65, for example, and gearing a portfolio around accumulation. Wall Street relied on armies of analysts who performed technical research into stocks, and often the process was rife with conflicts as the analysts supported the firm’s investment banking business. Overall, the process was transactional and performance-driven.

Since then, most practitioners have moved away from selling stocks or funds to an advisory model that is oriented toward helping investors achieve their goals. It views wealth not as an end point but as a fluid journey, guided by a unified, holistic, comprehensive plan that’s tailored to each client’s individual situation. To address their clients’ more complex wealth management challenges, today’s advisers draw not so much on individual technical training and processes but rather on the collective wisdom and perspective of small adviser teams who focus on addressing clients’ individual needs.

How advisers add value

We’ve found that forming a relationship with each client is a unique experience. No two clients are alike, so it’s important that there’s the right fit between what clients need and the adviser’s range of services.

People usually decide to hire an adviser when they settle into a career, start a family, or experience some other major life event. With busy lives, many find they don’t have the time or inclination to manage their finances themselves.

It’s not all about investment returns. The greatest value that an adviser can add is in seven areas of financial planning:

1. Budgeting

You shouldn’t be investing until you’re confident you can stick to a monthly budget and manage debt. A good adviser will help you construct a manageable budget, let you know when your spending exceeds your means, and advise you when you need to dial it back. Holding you accountable to your vision of the life you want is a major benefit of working with an adviser.

2. Investment Access

Larger advisory firms may be able to offer you investment options at a lower cost than you might get on your own, as well as access to difficult, highly rated, hard-to-access managers that may be closed to new investors. If an adviser is charging you 1% of your assets each year to manage your money, all in, you may recoup as much as half of that amount in terms of lower total costs.

3. Asset allocation strategy

An adviser’s fee should include creating an asset allocation strategy tailored to your individual goals and risk tolerance. You receive value when the adviser monitors your account and manages any future adjustments to keep that allocation strategy on target — either quarterly or annually. This can save you valuable time.

4. Retirement planning

Many investors don’t understand the different ways that various retirement-focused accounts can be used in income planning: 401(k)/403(b), traditional IRA, Roth IRA, income ladders, annuities, or taxable accounts. When an adviser helps you diversify your tax exposure, you may be better positioned to make your money last longer in retirement.

5. Asset protection

Once you have accumulated financial and other types of assets, you need to manage risk. An adviser can help you purchase various types of insurance, including property and casualty, life, liability/umbrella, and special policies or riders to cover valuable art or collectibles.

6. Cohesive tax strategy

Many investors don’t understand the different tax treatments that apply to 401(k), traditional or Roth IRAs, or taxable accounts — or how to diversify their tax exposure. Advisers can help you decide when to take Social Security benefits or required minimum distributions (RMDs) — which can be surprisingly complicated, depending on your situation.

7. Estate and gift planning

A full-service advisory firm should be able to quarterback the creation of your legacy planning and gifting strategy — with input from your attorney and tax professional. This includes the creation of trusts to pass your wealth efficiently to future generations or to distribute gifts of cash or securities to your loved ones or favorite causes in a tax-smart way.

What you should expect

Today’s financial advisers are able to offer much more than simply recommending a basket of stocks or mutual funds and seeing which way the market takes you. The adviser who ultimately earns your trust and business should carefully and thoughtfully review your situation to make sure you are fully supported in expressing your values, gaining investment access, developing a resilient asset allocation strategy, fine-tuning a cohesive tax strategy, and carrying out legacy wishes with estate and gift planning.

Perhaps most importantly, your adviser should work with you to re-establish goals and reinforce the importance of structure and sticking to your plan — especially when markets get choppy, or life throws you curveballs.

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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. There is no guarantee that asset allocation or diversification will enhance overall returns, outperform a non-diversified portfolio, nor ensure a profit or protect against a loss. Investing involves risk, including possible loss of principal.

Bruce Helmer and Peg Webb are financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on WCCO 830 AM on Sunday mornings. Email Bruce and Peg at yourmoney@wealthenhancement.com. Securities offered through LPL Financial, member FINRA/SIPC. Advisory services offered through Wealth Enhancement Advisory Services, LLC, a registered investment advisor. Wealth Enhancement Group and Wealth Enhancement Advisory Services are separate entities from LPL Financial.

 

Ship carrying taconite taking on water after underwater collision near Isle Royale

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NEAR ISLE ROYALE — The Michipicoten, a 689-foot laker, has taken on water after a collision with something under water on Lake Superior, 35 miles southwest of Isle Royale.

The U.S. Coast Guard, sharing the information on its USCG Great Lakes account on the social media platform X, said the incident happened at 6:53 a.m. Saturday and that 22 people were on board.

The Coast Guard also said a helicopter from Traverse City, Michigan and boat crews from Bayfield were on their way to the scene.

In updates on X, the Coast Guard said pumps operating on the Michipicoten have reduced the listing of the vessel from the initial report of 15 degrees to 5 degrees and that the ship is carrying taconite.

There are pumps on the ship to displace some water and there are currently no signs of spillage, according to the Coast Guard. The Edwin H. Gott is also on its way to the Michipicoten.

No injuries have been reported.

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Summer books 2024: It’s summertime and the reading’s easy. Or epic. Choose your own adventure.

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One strategy for summer reading — and yes, there are strategies — is to begin a project.

Dabble in short punchy books, but devote the season to an epic. You get three months.

I read “The Lord of the Rings” this way, one installment a summer, for years. Now I’m picking through Robert Caro’s (still unfinished) Lyndon Johnson biography this way. Another strategy: Give yourself a quasi-degree in something very specific. Read the complete short stories of the late Alice Munro. The crime novels of Stephen King. Or underrated Penguin Classics: This summer offers a couple of fresh contenders — Harry Crews’ “The Knockout Artist” (about a boxer with a talent for knocking himself out), and “A Last Supper of Queer Apostles,” unclassifiable writing about being gay under a dictatorship, by Chilean legend Pedro Lemebel.

You’ll clip right along.

Same goes for an excellent new edition of a monster: The Folio Society’s wonderful “Jonathan Strange & Mr. Norrell,” Susanna Clarke’s contemporary classic about magicians in 19th century England. As a single adventure, it was an 800-plus page cinderblock in 2004. Folio divides all of that into a much brisker trilogy, as it should have been, ideal for devouring in adult-size chunks that you can pass along to a precocious child or spouse, while continuing yourself.

As for the rest of you who just want a new mystery or history for the backyard, this summer is overstocked, even more so than the coming fall season. Yes, I read all of these; now get started.

No-guilt beach reads: One of the great American mystery series continues with “Farewell, Amethystine,” Walter Mosley’s 16th novel about Los Angeles detective Easy Rawlins. This one finds him in 1970, tracking an ex-husband, navigating gender upheaval. “The Sicilian Inheritance,” by airport favorite Jo Piazza, nails a clever twist on a contemporary cliche: Newly single American woman moves to Italy, discovers herself. The twist — she’s pulled into ugly family business — plays like a Palermo breeze.

You got the top pulled down and radio on, baby: “Traveling: On the Path of Joni Mitchell” (June 11) is the best kind of summer bio. It’s too critical and wandering to read like hero worship. NPR’s Ann Powers, among the smartest of music critics, captures the restlessness of a Mitchell album, walking through her catalog with eyes and ears open for both unease and transcendence. “Hip-Hop is History” (June 11) nails a similar feeling: It’s less like a timeline than a long hang with the Roots’ Questlove, who digs through the classics, offering reminiscence and discernment.

Family time: ‘Tis the season for other people’s problems. “Same as It Ever Was” (June 18), by Oak Park native Claire Lombardo (“The Most Fun We Ever Had”), and “Long Island Compromise” (July 9) by Taffy Brodesser-Akner (“Fleishman Is in Trouble”), check a lot of boxes — relatable but never dull, reliably bonkers family, funny. But they’re also breezy satires of privilege without sacrificing gravitas. Lombardo hems with modesty to the way minor breaks in routine spiral into epic crisis. Brodesser-Akner, who twists her knife with more relish, begins with actual crisis (a mysterious kidnapping and release), then leaps to the surprising ways it stamps fear into each member of the wealthy family. For austerity: “This Strange Eventful History,” Claire Messud’s somewhat autobiographical saga about several generations of a French family, severed from each other during World War II, and the way time and distance become inevitable.

Tales of future past: “What the Wild Sea Can Be: The Future of the World’s Ocean” (July 16), by Helen Scales, a marine biologist who doesn’t write like one. Here is a clear-eyed survey of what ails ocean life, shaped by Scales’s own experience and a bracing look at what’s being done. For something completely different: “The Book of Elsewhere” (July 23) is not quite science fiction, or fantasy, but as hard to pin down as you might expect a book authored by British surrealist China Miéville and Keanu Reeves. It’s also fun, a novel-length continuation of Reeves’s hot comic book, “BRZRKR,” a kind of Conan the Barbarian tale with black helicopters.

“Nat Turner, Black Prophet: A Visionary History” by Anthony E. Kaye and Gregory P. Downs, “The Work of Art” by Adam Moss, “Circle of Hope” by Eliza Griswold, photographed in Barrington. (Stacey Wescott/Chicago Tribune)

Rebel yells: “Nat Turner, Black Prophet: A Visionary History” (Aug. 13) begins with what you (might) know: In 1831, an enslaved preacher named Nat Turner led an uprising that was inevitably quashed, yet promised more to come. The late historian Anthony E. Kaye, with Gregory P. Downs, retells this in a fascinating new way, centering Turner’s conviction that he was a vessel of God. “Night Flyer: Harriet Tubman and the Faith Dreams of a Free People” (June 18), by National Book Award-winner Tiya Miles, takes a similar approach to a more familiar American hero: It focuses on Tubman as a spiritual leader and self-taught ecologist. It’s the lyrical biography we’ll need before Tubman — already more myth than person — begins gracing the $20 bill, starting in 2030.

Cruel summer: Personally, it’s not summer unless I stretch out with a new Stephen King, and if that sounds familiar: “You Like It Darker,” his latest collection of stories, is among his smartest, yet tipping toward crime tales and the slightly paranormal. The centerpiece, “Danny Coughlin’s Bad Dream,” is a stealth, 140-page mystery novel tucked beside a “Cujo” postscript and the gorgeous “Answer Man,” a late-career classic. For best results: Follow with Harlan Ellison’s “Greatest Hits,” a new compilation of vintage tales that shaped sci-fi and horror, inspiring King and Neil Gaiman (who writes the forward). Sentient AI, dystopias, alien copulation, evil twins …

Two absorbing sports books that aren’t actually about sports: Joseph O’Neill’s “Godwin” — like his celebrated 2008 novel “Netherland” — defies quick description. It reads like a fable, opening with the corporate chill of a Pittsburgh office then travels to suburbs of London and soccer fields of Africa. It follows the story of a soccer agent who talks his estranged brother into finding a soccer phenom. “Charlie Hustle: The Rise and Fall of Pete Rose, and the Last Glory Days of Baseball,” by former Chicago journalist Keith O’Brien, would make a nice double-header: It’s not biography but taxonomy, a pungent epic about hubris and, in the figure of the disgraced Cincinnati Red, moral vacancy.

Summer book recommendations include “Night Flyer” by Tiya Miles, “Hip-Hop is History” by Questlove, “Charlie Hustle” by Keith O’Brien, “You Like It Darker” by Stephen King, “Same as it Ever Was” by Claire Lombardo and “A Last Supper of Queer Apostles” by Pedro Lemebel. Photographed at South Boulevard Beach on June 3, 2024, in Evanston. (Stacey Wescott/Chicago Tribune)

It’s not the heat; it’s the brimstone: “Craft: Stories I Wrote for the Devil” (June 18), by Chicago-based Ananda Lima has an eye-catching premise — you’re reading a collection of stories by the author following a one-night stand with Satan — so clever, it’s a relief to report that’s merely the hook for a substantive first book of major confidence, and belly laughs. Speak of the devil: Randall Sullivan’s “The Devil’s Best Trick: How the Face of Evil Disappeared” and Ed Simon’s “Devil’s Contract: The History of the Faustian Bargain” (July 9) are ideal histories for the warmest weeks, cultural spelunkings into our centuries-old need to portray unencumbered immorality, from Nathaniel Hawthorne to the ‘80s Satanic Panic.

One lit life: “Norman Maclean: A Life of Letters and Rivers” is part author bio, part literary memoir, told by Rebecca McCarthy, a former student of Maclean who kept a lifelong friendship with the Hyde Park legend, a beloved professor at University of Chicago who — famously, very late in life — wrote “A River Runs Through It.”

Just a dream and the wind to carry me: It’s hard to relay how exhilarating, and unsettling, being a speck on the ocean is, with no other specks in sight, horizon to horizon. “Sailing Alone: A Surprising History of Isolation and Survival at Sea,” by maritime historian Richard J. King, gathers dizzying case studies of what drives people to do this, improvising steering systems for sleeping, talking to dolphins out of lonliness. Consider the complicated hero at the heart of Hampton Sides’ excellent best-seller, “The Wide Wide Sea: Imperial Ambition, First Contact and the Fateful Final Voyage of Captain James Cook.” Cook represented the best of global exploration. Until he represented the worst. As forward-thinking as he was with native cultures, he died on a beach in Hawaii, stoned by its people. Sides’s compulsively readable 16th-century history is about the gulf between decency and a boss’s orders.

“The Age of Grievance” by Frank Bruni, “Fire Exit” by Morgan Talty, “Footnotes from the Most Fascinating Museums” by Bob Eckstein, “Horror Movie” by Paul Tremblay and “Parade” by Rachel Cusk, photographed in Barrington. (Stacey Wescott/Chicago Tribune)

Summer ennui: If you have read Rachel Cusk — and if you haven’t, there’s your summer reading list — you’re safe to assume her latest novel about creative life, “Parade” (June 18), starts with a darkly funny come-on (an artist paints a portrait of his wife, makes it ugly and it sells), only to end up very far afield. “Fire Exit,” the lacerating debut novel by Morgan Talty, whose story set “Night of the Living Rez” was a 2022 critical smash, delves again into the families in a Native American community, for a tale of a man haunted by descendants present and just out of reach. Speaking of haunting: “We Burn Daylight” (July 30), by the underrated novelist Bret Anthony Johnston (“Remember Me Like This”) delivers another thriller less visceral than traumatic: The story of a cult in Waco, Texas, about to be taken by law enforcement, and the drama that unfolds inside and out. (Any similarities to Branch Davidians are purely intentional.)

Rethinking summer programming: “Something authentic, buried beneath something fake.” That’s how New Yorker TV writer Emily Nussbaum perfectly explains the allure of both “The Bachelor” and “Candid Camera” in “Cue the Sun! The Invention of Reality TV” (June 25). She works magic, walking on that wavering line between fandom and disgust but never scolding. “The Future Was Now: Madmen, Mavericks, and the Epic Sci-Fi Summer of 1982” (July 30), by “Caddyshack” historian Chris Nashawaty, begins with the maxim “Film critics get it wrong all the time,” then proves it. This is Gen-X catnip, a backstage rewind through a momentous movie summer that delivered us “Blade Runner,” “The Thing,” “E.T.,” “The Road Warrior” and far more.

Summertime sadness: “Challenger: A True Story of Heroism and Disaster on the Edge of Space,” by Adam Higginbotham — whose remarkable “Midnight in Chernobyl” established him as the go-to narrator of tragedies — reads like a backward mystery, starting with the Space Shuttle explosion in 1986, then unwinding through institutional arrogance and the queasy assumption of “acceptable risk” that dooms even the best intentions. Eliza Griswold’s equally immersive “Circle of Hope: A Reckoning with Love, Power and Justice in an American Church” (Aug. 6) documents the conflicts and frayed idealism that pulled a Philadelphia church apart over 30 years, but Griswold — whose “Amity and Prosperity” won the nonfiction Pulitzer in 2019 — grounds much of the story in old-fashioned fly-on-the-wall reporting, tagging along until she’s invisible.

“The Knockout Artist” by Harry Crews, “Farewell, Amethystine” by Walter Mosley and “Sailing Alone” by Richard J. King. (Stacey Wescott/Chicago Tribune)

Summer Art Fare: At some point this summer, you may duck into the cool marble halls of a museum. “Footnotes from the Most Fascinating Museums,” by New Yorker cartoonist Bob Eckstein, is a lovely wish list of American options, dreamily illustrated, full of histories of the classics (the Art Institute of Chicago), but also battleship museums, Kentucky’s Noah’s Ark, the Rothko Chapel in Texas … “The Work of Art: How Something Comes From Nothing,” by former New York magazine editor Adam Moss, should get you through the rest of summer. Here is a brick of insight into that creative purgatory called the process, featuring notebook scribbles, sketches and chats with Sofia Coppola, Gay Talese, Suzan-Lori Parks and many more artists in far-flung fields. “Dinosaurs at the Dinner Party” (Aug. 6) could be an engrossing anecdote from those books, the story of why history museums are now occupied by creatures none of us have seen. It follows the accidental discoveries that led to piecing together the first dinosaur skeletons, and what that meant for naturalists and clergy alike.

Election-year reading that isn’t a chore: What ails us, Frank Bruni writes in “The Age of Grievance,” isn’t grievance — this is a nation, of course, founded on the stuff. But rather, “a manner of individualism often indistinguishable from narcissism,” fostering “a violent rupture of our national psyche.” It’s an illuminating rant about humility, and one that echoes throughout “The Playbook: A Story of Theater, Democracy and the Making of a Culture War,” by James Shapiro. Here, the history is the birth and death of the New Deal’s Federal Theatre Project, and the question of whether a country so fractious can sustain a national theater. Each chapter, often centered on loathsome political hearings, is part rousing, part enraging.

Dipping into the deep end: One of the year’s best books is “I Just Keep Talking: A Life in Essays” by Nell Irvin Painter, a digressive, accessible summer course on visual aesthetics (Black Power art), Southern history, Black figures both well-known (Sojourner Truth) and obscure (Alma Thomas), but primarily, the art of writing a pointed essay. “The Art of Dying: Writings 2019-2022” collects the final 46 stories by late New Yorker critic Peter Schjeldahl, from his 2019 essay about learning he had advanced lung cancer to his final piece on German photographer Wolfgang Tillmans. It’s another art course in a book (with a bonus introduction by Schjeldahl pal Steve Martin). For a decidedly more fun essay: “Any Person Is the Only Self” (June 11), by Elisa Gabbert, which collects her thoughts on Sylvia Plath, Motley Crue, “Point Break,” Proust …

“Rebel Girl” by Kathleen Hanna and “The Wide Wide Sea: Imperial Ambition, First Contact and the the Fateful Final Voyage of Captain James Cook” by Hampton Sides. (Stacey Wescott/Chicago Tribune)

I know what you read this summer: Gabino Iglesias, whose “The Devil Takes You Home” was one of the best books of 2022, summons similar darkness for “House of Bone and Rain” (Aug. 6), returning the author to his native Puerto Rico for more gangs, bad weather and traditions that slowly draw in creepy crawlies. Iglesias is where Paul Tremblay (“Cabin at the End of the World”) was a few years ago. “Horror Movie” (June 11), Tremblay’s latest, is a new jewel, the story of a cursed film, alternating between the screenplay and “the unreality of the entertainment ecosystem” that worships it. (Read before the inevitable horror movie of “Horror Movie.”)

Summer sleepers: “The Swans of Harlem” tells a vibrant, lovingly researched group biography of the 152nd Street Black Ballet Legacy Council, the five Black ballerinas who, at the peak of the civil rights movement, brought new urgency to a segregated art form. “When Women Ran Fifth Avenue” is another unheralded history, a fascinating excavation of the midcentury women — including two Chicagoans, Dorothy Shaver and Geraldine Stutz — whose designs and ideas reinvented American department stores and consumer fashion. In each of these books, a set of women is assembling a world they want. Bringing that history into today: In “Rebel Girl: My Life as a Feminist Punk,” Kathleen Hanna of Le Tigre and Bikini Kil writes about the grassroots Riot Grrrl movement and her fidelity to a low-fi, DIY independent music scene with bluntness, stumbling through the ‘90s, loaded with exclusionary politics and hope.

cborrelli@chicagotribune.com

 

Safety-net health clinics cut services and staff amid Medicaid ‘unwinding’

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Katheryn Houghton | (TNS) KFF Health News

One of Montana’s largest health clinics that serves people in poverty has cut back services and laid off workers. The retrenchment mirrors similar cuts around the country as safety-net health centers feel the effects of states purging their Medicaid rolls.

Billings-based RiverStone Health is eliminating 42 jobs this spring, cutting nearly 10% of its workforce. The cuts have shuttered an inpatient hospice facility, will close a center for patients managing high blood pressure, and removed a nurse who worked within rural schools. It also reduced the size of the clinic’s behavioral health care team and the number of staffers focused on serving people without housing.

RiverStone Health CEO Jon Forte said clinic staffers had anticipated a shortfall as the cost of business climbed in recent years. But a $3.2 million loss in revenue, which he largely attributed to Montana officials disenrolling a high number of patients from Medicaid, pushed RiverStone’s deficit much further into the red than anticipated.

“That has just put us in a hole that we could not overcome,” Forte said.

RiverStone is one of nearly 1,400 federally funded clinics in the U.S. that adjust their fees based on what individuals can pay. They’re designed to reach people who face disproportionate barriers to care. Some are in rural communities, where offering primary care can come at a financial loss. Others concentrate on vulnerable populations falling through cracks in urban hubs. Altogether, these clinics serve more than 30 million people.

The health centers’ lifeblood is revenue received from Medicaid, the state-federal subsidized health coverage for people with low incomes or disabilities. Because they serve a higher proportion of low-income people, the federally funded centers tend to have a larger share of patients on the program and rely on those reimbursements.

But Medicaid enrollment is undergoing a seismic shift as states reevaluate who is eligible for it, a process known as the Medicaid “unwinding.” It follows a two-year freeze on disenrollments that protected people’s access to care during the covid public health emergency.

As of May 23, more than 22 million people had lost coverage, including about 134,000 in Montana — 12% of the state’s population. Some no longer met income eligibility requirements, but the vast majority were booted because of paperwork problems, such as people missing the deadline, state documents going to outdated addresses, or system errors.

That means health centers increasingly offer care without pay. Some have seen patient volumes drop, which also means less money. When providers like RiverStone cut services, vulnerable patients have fewer care options.

Jon Ebelt, communications director of the Montana Department of Public Health and Human Services, said the agency isn’t responsible for individual organizations’ business decisions. He said the state is focused on maintaining safety-net systems while protecting Medicaid from being misused.

Nationwide, health centers face a similar problem: a perfect financial storm created by a sharp rise in the cost of care, a tight workforce, and now fewer insured patients. In recent months, clinics in California and Colorado have also announced cuts.

“It’s happening in all corners of the country,” said Amanda Pears Kelly, CEO of Advocates for Community Health, a national advocacy group representing federally qualified health centers.

Nearly a quarter of community health center patients who rely on Medicaid were cut from the program, according to a joint survey from George Washington University and the National Association of Community Health Centers. On average, each center lost about $600,000.

One in 10 centers either reduced staff or services, or limited appointments.

“Health centers across the board try to make sure that the patients know they’re still there,” said Joe Dunn, senior vice president for public policy and advocacy at the National Association of Community Health Centers.

Most centers operate on shoestring budgets, and some started reporting losses as the workforce tightened and the cost of business spiked.

Meanwhile, federal assistance — money designed to cover the cost of people who can’t afford care —remained largely flat. Congress increased those funds in March to roughly $7 billion over 15 months, though health center advocates said that still doesn’t cover the tab.

Until recently, RiverStone in Montana had been financially stable. Before the pandemic, the organization was making money, according to financial audits.

In summer 2019, a $10 million expansion was starting to pay off. RiverStone was serving more patients through its clinic and pharmacy, a revenue increase that more than offset increases in operating costs, according to documents.

But in 2021, at the height of the pandemic, those growing expenses — staff pay, building upkeep, the price of medicine, and medical gear — outpaced the cash coming in. By last summer, the company had an operational loss of about $1.7 million. With the Medicaid redetermination underway, RiverStone’s pool of covered patients shrank, eroding its financial buffer.

Forte said the health center plans to ask state officials to increase its Medicaid reimbursement rates, saying existing rates don’t cover the continuum of care. That’s a tricky request after the state raised its rates slightly last year following much debate around which services needed more money.

Some health center cuts represent a return to pre-pandemic staffing, after temporary federal pandemic funding dried up. But others are rolling back long-standing programs as budgets went from stretched to operating in the red.

California’s Petaluma Health Center in March laid off 32 people hired during the pandemic, The Press Democrat reported, or about 5% of its workforce. It’s one of the largest primary care providers in Sonoma County, where life expectancy varies based on where people live and poverty is more prevalent in largely Hispanic neighborhoods.

Clinica Family Health, which has clinics throughout Colorado’s Front Range, laid off 46 people, or about 8% of its staff, in October. It has consolidated its dental program from three clinics to two, closed a walk-in clinic meant to help people avoid the emergency room, and ended a home-visit program for patients recently discharged from the hospital.

Clinica said 37% of its patients on Medicaid before the unwinding began lost their coverage and are now on Clinica’s discount program. This means the clinic now receives between $5 and $25 for medical visits that used to bring in $220-$230.

“If it’s a game of musical chairs, we’re the ones with the last chair. And if we have to pull it away, then people hit the ground,” said CEO Simon Smith.

Stephanie Brooks, policy director of the Colorado Community Health Network, which represents Colorado health centers, said some centers are considering consolidating or closing clinics.

Colorado and Montana have among the nation’s highest percentages of enrollment declines. Officials in both states have defended their Medicaid redetermination process, saying most people dropped from coverage likely no longer qualify, and they point to low unemployment rates as a factor.

In many states, health providers and patients alike have provided examples in which people cut from coverage still qualified and had to spend months entangled in system issues to regain access.

Forte, with RiverStone, said reducing services on the heels of a pandemic adds insult to injury, both for health care workers who stayed in hard jobs and for patients who lost trust that they’ll be able to access care.

“This is so counterproductive and counterintuitive to what we’re trying to do to meet the health care needs of our community,” Forte said.

____

KFF Health News correspondent Rae Ellen Bichell in Longmont, Colorado, contributed to this report.

(KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs of KFF — the independent source for health policy research, polling and journalism.)

©2024 KFF Health News. Distributed by Tribune Content Agency, LLC.