North Carolina’s Medicaid program is facing an extreme budget deficit of $319 million that leaders warned would lead to cuts being made if more funds were not appropriated by the October 1 deadline. The state House and Senate both drafted legislation to fully fund Medicaid in September, with every lawmaker in each chamber supporting their respective bill. However, Senate Leader Phil Berger and House Speaker Destin Hall refused to take up the other’s bill due to a dispute between the two GOP leaders over funding for a children’s hospital in Apex.
With the two GOP leaders refusing to budge, the October 1 deadline came and left without legislators passing a bill to provide funding, leading to the state Department of Health and Human Services (DHHS) making cuts to Medicaid.
NC Medicaid was expanded in 2023 under former Governor Roy Cooper and provides healthcare to over 3 million North Carolina residents. Some rural areas in the state have more than half of their population enrolled in the program. The cuts to the program made by the DHHS are reducing what the state gives doctors for taking Medicaid patients, which could lead to providers refusing Medicaid patients or reducing the number they take, according to Department of Health and Human Services Secretary Dev Sangvai.
“We have heard from providers who have said, ‘With these rate cuts, I’m not going to take any new Medicaid patients,’” Sangvai said in an interview. “Oftentimes, the phrase they will use is, ‘I’m closed to new Medicaid.’ So thankfully, continuing to serve the patients who they already consider to be their patients, but not taking any new Medicaid patients. … We’ve also heard some say, ‘Hey, maybe now is the time for me to stop seeing Medicaid altogether because of these rate cuts.’”
Despite concerns raised by healthcare officials, providers, state leaders, and advocates, Republican lawmakers are refusing to take legislative action to resolve the situation. Instead, Republicans are taking to social media to blame Stein for the lack of funds, claiming that the state’s fund for Medicaid would have run out by early 2026. However, Stein argues that holding off on the cuts until that time would only make sense if lawmakers can pass a state budget by then, which, with the dispute between GOP leaders, is not looking probable as the year comes to an end.
“Part of the reason why we put the rate cuts in place — and the magnitude of the rate cuts — is really to consider what happens if no additional dollars are funded,” Sangvai explained.
For months, Governor Josh Stein and his administration have been consistently urging lawmakers to fill the funding gap in the state’s Medicaid program to no avail. This month, Stein held a press conference alongside health care leaders and advocates and called a special session for lawmakers to return to Raleigh and pass a bill to fund Medicaid after they had failed to do so before going on break.
“The General Assembly is using people’s health and well-being as bargaining chips in an unrelated budget dispute, and it’s shameful. The legislature must come back to Raleigh and do its job so that the three million North Carolinians who rely on Medicaid can get the care they need.” Stein said.
Lawmakers returned on the date Stein set, but no votes were taken, and most Republican lawmakers failed to show up. House Speaker Destin Hall wrote to Stein, claiming that although the constitution allows the Governor to call a special session under extreme circumstances, the Medicaid funding deficit does not meet that criteria.
Despite Republican lawmakers ignoring Stein’s call for a special session, a group of Democrats came back to Raleigh to talk about the state budget and the lack of Medicaid funding.
Democrats held the public hearing, alongside business owners, teachers, and community members, to highlight the harmful impact of North Carolina going over 140 days without a comprehensive state budget. State Republicans’ refusal to pass a budget not only puts Medicaid at risk, but also funding for public schools, hospitals, and more.
“North Carolinians, we want you to understand, we’re here for you, we care about what’s going on, and at some point in time, we’re hoping to convince our colleagues that you matter also,” stated House Democratic Leader Robert Reives.
“From the coast the mountains, we’ve had members that took time today knowing they were not going to be able to move any legislation, and came here today because we believe we’re supposed to represent all of North Carolinians,” added Senate Democratic Leader Sydney Batch.
Amid their absence, Gov. Stein continues to urge state Republicans to come back to the table and do their jobs for the North Carolinians they serve.
“Speaker Hall and President Pro Tempore Berger would rather come up with excuses than fund Medicaid for the people of North Carolina. This is the latest example of their dysfunction that has become the norm in the North Carolina General Assembly,” Stein said.
“The impact of their failure will have profound consequences for North Carolinians. They are forcing health care providers to make painful decisions to stop accepting Medicaid patients, cut salaries, reduce critical services, or close altogether. NCDHHS can’t put health care costs on a credit card. The longer the General Assembly refuses to fund our Medicaid program, the more they erode our health care system… I will keep fighting for the health care of North Carolinians. I urge your representatives to do the same. And I call on North Carolinians to tell their representatives and senators to do their jobs.”
Usually, this funding would come inside legislation that sets up the state budget. However, the struggle for Medicaid funding comes alongside the GOP’s refusal to pass a state budget, leaving North Carolina as the only state in the entire country without a comprehensive state budget.
Lawmakers are set to return to Raleigh in December, but there have been no announcements as to what they will take up upon returning, with some lawmakers announcing they have no plans to vote for the rest of the year.
As costs continue to skyrocket on everything from groceries to health care, vital funding for crucial programs like Medicaid is more important than ever. Over the holiday season, we are collecting stories from North Carolinians who are being impacted by the rising cost of living.
Join our storytelling campaign on rising costs, titled “The Cost We Carry”. With just a couple of sentences, you could contribute to a movement of North Carolinians creating change:
Submit your story at https://carenc.org/tell-us-about-your-budget/
