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Looming Medicaid Cuts Will Hurt North Carolinians
A perspective from Paul Shafer and Caroline Sloan
On April 30th, Governor Josh Stein signed House Bill 696 (HB 696) into law, ending a protracted funding shortfall for the state’s Medicaid program, which provides health insurance coverage to over three million low-income, disabled, and elderly North Carolinians. Without appropriate funding, there was a risk that the state’s Medicaid expansion could be withdrawn, endangering coverage for over 700,000 people, an outcome that both sides of the aisle were eager to avoid.
There had been a $319 million gap between funding already allocated by the General Assembly and projected costs for the year, a hole that has now been plugged. However, this bill is a lot more than a funding stopgap. It lays out a series of steps that the state is taking in response to the One Big Beautiful Bill Act, or H.R. 1, passed by Congress and signed by President Trump last July, which is projected to cut nearly $1 trillion from Medicaid nationally over the next decade.
Enrolling in Medicaid is already no walk in the park, HB 696 will make it even harder. First, before they can even apply for Medicaid, individuals will need to pre-emptively comply with work reporting requirements for three consecutive months, going beyond what H.R. 1 requires. This generally means proving at least 80 hours of work or enrollment in school along with other pathways. Once enrolled, people will need to prove their activities for at least three of every six months to keep Medicaid. While some are exempt from these requirements (pregnant, parents, caregivers, and medically frail), the confusion and extra documentation may lead people to not bother applying even when they are eligible.
Just this change could reshape who is in Medicaid and how they receive care. Nearly a quarter of a million North Carolinians are projected to lose coverage and at least five hospitals in the state could be at risk of closure due to the lost revenue. Safety net hospitals nationwide are projected to face a 35% increase in uncompensated care. Implementing work reporting requirements is also costly. The state will need to create and maintain an online portal for reporting work requirements and hire staff to answer phones and help enrollees. This will likely cost the state millions of dollars per year based on what we have seen in other states, often paid to private consulting firms. The state joined a lawsuit filed in late June by 26 states against the federal government pushing back against the work requirements.
Second, the state is ramping up sharing of immigration data with the federal government. Medicaid application records were historically confidential; new language in HB 696 would allow the state to refer cases to Homeland Security when immigration status or citizenship cannot be verified. Green card holders, refugees, asylum seekers, victims of human trafficking or domestic violence, and others are eligible for certain full or emergency coverage, but this may encourage them to stay home rather than get the care that they need.
Third, the state will implement the maximum copayments in Medicaid allowed by federal law. The state historically had $4 copays but with a lot of exceptions, such as for emergencies, pregnancy, and preventive care. H.R. 1 allows for expanded copays to up to $35 for most services and even higher for some emergency department care, which places a lot of new costs and guesswork onto patients. Since providers can require payment upfront, this could keep many out of the clinic or from picking up their prescriptions, which could be devastating for the health of North Carolinians.
These aren’t the only changes but are some of our biggest areas of concern. Governor Stein has already pledged to work with the General Assembly to make some changes to what he called “serious flaws” in the bill. Though with the bill already passed, it seems that a lot of the leverage to rein in some of the sharper edges of these changes is already lost.
Paul Shafer (UNC ’06, ’19) is a visiting scholar at the Duke Sanford School of Public Policy and associate professor and co-director of the Medicaid Policy Lab at Boston University. Caroline Sloan is a primary care physician and health services researcher at Duke University.
“Viewpoints” on Chapelboro is a recurring series of community-submitted opinion columns. All thoughts, ideas, opinions and expressions in this series are those of the author, and do not reflect the work or reporting of 97.9 The Hill and Chapelboro.com.
