The clock is ticking. If state lawmakers do not cough up several hundred million dollars before Oct. 1, North Carolina’s Department of Health and Human Services will cut Medicaid provider rates across the board.
At stake is the viability of rural hospitals, health care jobs, availability of certain services and the health of low-income and rural North Carolinians.
By Tuesday evening, the state Senate and House had passed separate versions of a Medicaid funding bill. However, despite Republican control in both chambers, lawmakers in each chamber refused to consider the other due to an intraparty budget dispute.
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The House insisted on a “clean bill,” that only dealt with Medicaid, and nothing else. The House version, an amended Senate Bill 403, funds the Medicaid rebase — the amount needed to maintain coverage for people already using the program considering inflation, federal policy shifts and other changes — at $690 million.
So does the Senate’s version, an amended House Bill 562. Both also provide millions to fund contracts needed for the state’s Medicaid managed care program.
But the Senate didn’t heed the House’s warning; Republican leaders tried to include $103.5 million for the N.C. Children’s Hospital in the bill, despite the funding already being one of a few sticking points in ongoing, tense budget negotiations between lawmakers in the two legislative chambers.
Neither the House nor the Senate plans to meet again until Oct. 20, far past the deadline set by the North Carolina Health and Human Services Department.
In between trading jabs at each other, Republican leadership cast blame on Democratic Gov. Josh Stein for the incoming Medicaid provider rate cuts. As executive, they argued he could have used his influence over DHHS to move the deadline further back.
No matter who’s responsible, North Carolinians will soon face the consequences of incoming Medicaid provider cuts.
How did lawmakers get here
On Independence Day, federal lawmakers in the Republican-controlled U.S. Congress passed Republican President Donald Trump’s One Big Beautiful Bill.
In it were major changes to Medicaid, a government health insurance program available to low-income Americans. More than a quarter of North Carolinians use the program, according to a fact sheet. It’s disproportionately used in rural counties, and is a major revenue source for rural hospitals.
In addition to instating work requirements for adults using the program, the law capped Medicaid provider taxes and reduced the portion of Medicaid the federal government would pay for, leaving states to either find the difference, or cut services or beneficiaries.
According to N.C. DHHS, North Carolina will experience $49.9 billion in federal Medicaid cuts over the next decade.
To maintain current services and provider payments to those already enrolled in North Carolina’s Medicaid program — excluding the 650,000 North Carolinians who were part of the 2023 Medicaid expansion — DHHS estimates a need for $819 million annually.
In late July, state lawmakers agreed to $500 million for the rebase in a mini-budget. A few weeks later, DHHS sent a letter to the General Assembly noting that if they weren’t able to fully fund the rebase, they would start cutting the $319 million shortfall on Oct. 1. Medicaid providers’ rates will be reduced by 3% to 10%, with some services eliminated.
Real lives, real heartbreak
Medicaid isn’t abstract to all lawmakers. To Rep. Julia Greenfield, D-Mecklenburg, it’s what helped her treat countless patients when she worked as an emergency medicine and trauma nurse.
She also saw firsthand when people couldn’t access the care they needed.
“Parents choosing between groceries and prescriptions, rural residents driving hours for basic treatment, seniors arriving too late to receive care because they couldn’t afford it — I saw preventable tragedies, unnecessary pain and devastating loss, real lives, real heartbreak,” Greenfield said at a press conference on Monday.
Medicaid provider rates pay part of health care workers’ wages. With reduced rates, providers may serve fewer Medicaid patients or move.
If providers are getting less money from their Medicaid patients, they may cut services or stop serving Medicaid patients altogether Rep. Sarah Crawford, D-Wake, said. They may have to lay off employees.
Rural counties have a disproportionate number of people on Medicaid, which means that rural hospitals rely on the government to reimburse them for health care they provide to low-income North Carolinians. Rep. Rodney Pierce, D-Halifax, said in the three counties he represents — Halifax, Northampton and Warren — over 35% of residents utilize Medicaid.
The vast majority are women between six and 18, he added.
Rep. Maria Cervania, D-Wake, said counties really supported the state’s 2023 Medicaid expansion.
“The three main issues that were identified that pushed Medicaid expansion over the edge was the economy and how it would help those communities, the jobs that it would generate, and also the number of people that it would help,” she said.
So, whose fault is it?
Everyone’s looking for a scapegoat.
Some lawmakers in the House, led by Speaker Destin Hall, R-Caldwell, are blaming those in the Senate for passing a Medicaid bill they knew the House wouldn’t like, then high-tailing it out of town.
Some lawmakers in the Senate, led by President Pro Tempore Phil Berger, R-Rockingham, are blaming those in the House for reneging on an agreement allegedly made in 2023 to fully fund the North Carolina Children’s Hospital.
Hall, who was not the speaker at the time, said the facts have changed, and the investment no longer makes sense.
“What is a standalone hospital, why is that a good thing?” he asked. “We have at least five children’s hospitals in this state. We’ve got three or four really big ones. You’ve got Wake Forest, you’ve got the one in Charlotte, you’ve got Duke, you’ve got one here in Wake County already.”
Republican lawmakers in both chambers are blaming the governor for doing this now. Based on fiscal analysis, Hall said he thinks DHHS can probably last until June 2026 before needing to make cuts.
“The only real explanation for why he would do that is that the Democrats, frankly, they want to try to run on that and make it an issue (in the 2026 election),” Hall told reporters Tuesday.
Stein, for his part, said the Republican leaders are “putting their politics ahead of our people” in a statement.
Rep. Grant Campbell, R-Cabarrus, is over it all. He disagrees with how the issue is being handled.
“Not everything has to be leverage,” he said.
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