NC lawmakers give initial OK to Medicaid bailout bill amid concerns over provisions ...Middle East

North Carolina Legislative Building (Photo: Galen Bacharier/NC Newsline)

North Carolina House and Senate lawmakers voted nearly unanimously Wednesday to approve a measure that bails out the state’s Medicaid program, which was on the verge of running out of money after it was underfunded last year.

But the bailout bill, House Bill 696, comes with a long list of policy changes and “anti-fraud” measures. Bill supporters from both parties say the provisions are needed to make sure the state can maintain its expanded Medicaid program in the face of federal changes. But advocates say some changes are unnecessarily harsh and will have unintended consequences.

Republicans in the House and Senate failed to agree on a bill last year that would have provided the full funding the North Carolina Dept. of Health and Human Services said Medicaid would require for the year. Some Republicans doubted that the $319 million figure was accurate. But House and Senate Republican leaders said Tuesday they had agreed on the figure.

NC lawmakers will fill Medicaid funding gap, but larger state budget issues remain unresolved

However, House Speaker Destin Hall said Tuesday the funding bill would also include provisions to control costs. He said the increasing cost of Medicaid is unsustainable: “We’ve got to get our arms around it.”

The legislation adds oversight measures to mitigate waste and abuse. These include requiring county-level officials to more frequently review eligibility, changing monitoring from quarterly to monthly.

The bill also raises copays for inpatient hospital care to $25 per visit, the maximum allowable amount under federal Medicaid requirements. It also implements a three-month “lookback period” for work requirements, also the federal maximum, meaning applicants must demonstrate 80 hours of work, educational, or community service activities per month over the three months prior to be eligible for coverage.

John Broome, the government relations director for the American Cancer Society Cancer Action Network North Carolina, said the bill will place an especially heavy burden on cancer patients, who must receive frequent inpatient care.

“This bill creates unnecessary red tape for patients seeking cancer treatment as well as anyone needing access to screenings by adding extra layers of bureaucracy and increasing patient costs,” Broome said in a statement.

However, both Democrats and Republicans said the changes will maintain the state’s eligibility for the maximum 90%/10% federal funding match for the Medicaid program.

“I want you all to make sure you understand – 700,000 people got picked up on the Medicaid expansion,” said Rep. Carla Cunningham (D-Mecklenburg). “We were attempting not to lose as many as possible, even by putting the federal guidelines in place.”

A major source of concern for immigration advocates is a provision that requires workers at the North Carolina Department of Health and Human Services to refer any Medicaid applicant or recipient for whom “citizenship or satisfactory immigration status could not be verified” to the Department of Homeland Security for investigation.

Undocumented immigrants are ineligible for Medicaid benefits, with the exception of pregnant individuals, who may receive emergency Medicaid covering prenatal care, labor and delivery, and post-partum care.

Rep. Maria Cervania (D-Wake) said she was concerned about how the changes would affect pregnant women, children and their families. She predicted some would skip preventive care and wait until they’re very ill to seek care in emergency rooms instead.

“They love North Carolina, and those people may be facing the loss of access to basic health care coverage because of these new requirements,” she said. “Those costs don’t disappear just because we ignore them.”

According to news outlet The 19th, the Trump administration deported more than 300 pregnant, postpartum, and nursing immigrants between January 2025 and February 2026.

“By forcing our county workers to act as federal informants, the state is making every child in our community less safe,” advocacy group Siembra NC Co-Director Kelly Morales said in a statement. “North Carolina Republican Party leadership should present a clean Medicaid funding bill that provides care, not fear, to all North Carolinians.”

The bill also empowers the state auditor to conduct a “performance audit” of the state Medicaid program, providing the office with $500,000 to do so. This is among the measures that Hall said Tuesday are aimed at “cutting out waste, fraud, and abuse.”

“We’re going to ask the state auditor to do an audit of the program to look for areas of efficiency and where we may be inefficiently spending our resources,” said Rep. Tim Reeder (R-Pitt). “We’ve heard a lot in other states about fraud and waste and abuse, some really egregious examples.”

But House Democratic Leader Robert Reives (D-Chatham) said on Wednesday that the provision serves only to undercut North Carolina Attorney General Jeff Jackson, who has authority over prosecuting Medicaid fraud.

He likened it to overhauls that shifted responsibility over the state Board of Elections and other regulatory entities from the governor’s administration to the auditor.

“There’s this office that we’ve got that presently still has its same duties, and we call it the attorney general,” Reives said. “I am confident that voters made a decision of who they wanted for attorney general, who they wanted for governor, who they wanted for state auditor, based on the definitions that were provided at the time.”

Nonetheless, Reives and every other House Democrat except Rep. Pricey Harrison (D-Guilford) voted in favor of H696. It passed the House by a vote of 112-1, and passed 48-1 in the Senate, with Sen. Michael Garrett (D-Guilford) the lone “no” vote there.

The bill is scheduled for a final vote in both chambers April 28. It then goes to Gov. Josh Stein for his signature.

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