Five Ways the ‘One Big Beautiful Bill’ Could Make It More Difficult to Get Health Insurance in N.C.

It took a decade to build the bipartisan support that culminated in North Carolina’s Medicaid expansion in 2023. That progress could be wiped out in “one second” by pending federal legislation, said former state Department of Health and Human Services Secretary Kody Kinsley.

Some Republicans in Congress have repeatedly claimed that no one will lose health insurance as a result of the “One Big Beautiful Bill Act.” But an analysis from the nonpartisan Congressional Budget Office found that 10.9 million Americans stand to lose coverage under the House-passed bill. That could include as many as 523,506 North Carolinians.

The bill would increase work requirements, complicate enrollment, and restrict how states pay for Medicaid, the federal health insurance program that covers low-income individuals and families.

“The only way you reduce costs in a Medicaid program is by taking eligibility away from people or watering down benefits,” Kinsley, who worked for Democratic Gov. Roy Cooper and is now a senior policy advisor at Johns Hopkins University, told The Assembly.

N.C. Health and Human Services Secretary Dev Sangvai said the federal proposals “would slash billions [of dollars] from the system and erode the infrastructure we have created to keep people healthy and safe.

“People who are already struggling to make ends meet will face new barriers to care for potentially life-threatening illnesses. These proposed changes can’t simply be patched over with state dollars.”

The House bill also impacts the tax credits from the Affordable Care Act that have made health insurance more affordable. More than 1 million North Carolinians buy private health insurance through healthcare.gov. Higher costs could lead some to drop their coverage.

Republican lawmakers in the House and Senate want to extend the individual and corporate tax cuts of Trump’s 2017 Tax Cuts and Jobs Act, which expire at the end of 2025; cutting Medicaid would help pay for them. Still, the Congressional Budget Office estimates the House’s “One Big Beautiful Bill” would increase deficits by $2.8 trillion over the next decade.

North Carolina’s senior senator, Republican Thom Tillis, said he is reviewing the legislation and is “reaching out to my state leaders who were responsible for Medicaid expansion to see how they could potentially absorb some of the proposals.”

In a statement to The Assembly, Sen. Ted Budd, also a Republican from North Carolina, said he supports “common sense work requirements” and removing undocumented immigrants nationally from Medicaid coverage. The House bill would reduce Medicaid funding to states that provide coverage to certain types of non-citizens; Kinsley said North Carolina does not provide any coverage beyond federal eligibility requirements. 

A recent poll found few Americans understand what is in the bill and how it might impact them, which is perhaps understandable. H.R. 1 clocks in at 1,018 pages, while the Senate Committee on Finance’s adjustments alone number 549 pages. 

The U.S. House passed H.R. 1 on May 22 with a 215-214 vote, almost entirely along party lines. A key Senate committee responded with changes on June 16.

Though the two versions are mostly similar, the Senate proposed several changes that have ruffled feathers in the House. The Senate has to vote on their version of the bill, then send it back to the House for their vote. If both sides can agree on a single version, it will go to the president for his signature.

If that happens, here’s what it could mean for health care coverage in North Carolina:

1. Increased premiums for insurance purchased through healthcare.gov.

More than one million North Carolinians buy private insurance through the Affordable Care Act Marketplace, often referred to as Obamacare. They could see their premiums increase by hundreds, even thousands, of dollars each month if Congress fails to extend the expanded tax credits that currently subsidize those plans. 

Congress created the credits in 2014 and expanded them in 2021 as part of the pandemic-era American Rescue Plan Act; the expanded version is slated to expire at the end of 2025. 

Neither version of the bill extends the expanded credits; both tighten eligibility instead.

“Generally people have thought this [bill] is just about Medicaid…and undocumented people on Medicaid, and the ‘undeserving poor,’” said Kinsley. But he pointed out that nearly 45 percent of North Carolinians are employed by small businesses, which may not be able to afford to offer employee health insurance. Those workers can either apply for Medicaid, buy through the marketplace, or remain uninsured. 

Without the expanded credits, the cost of marketplace insurance for a single 40-year-old in North Carolina making $31,000 a year would go up $1,140 a year, according to an analysis by KFF, a nonprofit health policy research, polling, and news organization formerly known as the Kaiser Family Foundation.

For a 60-year-old couple making $82,000 a year, annual premiums would increase from $6,960 to more than $31,200 in some parts of the state. 

All 10 Republican members of the U.S. House delegation from North Carolina voted for the bill. Their staffers did not respond to multiple requests for comment for this article. 

2. Medicaid expansion ends in North Carolina.

When state lawmakers expanded Medicaid in 2023, they widened the income eligibility brackets. Previously, only adults ages 19 to 64 who earned up to the federal poverty level—or less than $27,750 a year for a family of four—were eligible, as well as children, pregnant women, or individuals with disabilities or certain health conditions.

After Medicaid expansion, eligibility increased to 138 percent of the federal poverty level, or $43,056 a year for a family of four. 

Almost overnight, 664,000 more North Carolinians were eligible for health insurance.

However, that expansion came with a caveat: If the federal government lowered its matching rate (currently 90 percent, while states cover the remaining 10 percent), expansion would end. This makes North Carolina and eight other states “trigger law” states.

H.R. 1 proposes reducing the federal match from 90 percent to 80 percent for “specified states” that provide any medical care (even fully state-funded care) to “non-certain aliens” as defined in federal law.

North Carolina has not used state funds to expand healthcare access to people who are not legal residents, Kinsley said. The state’s Medicaid eligibility rules conform with federal law, which makes a trigger law funding reduction a remote scenario, he said.

However, even hearing about potential changes to Medicaid expansion is concerning for many residents like Dylan and Lauran Ashley Ward, of Laurinburg, N.C. Lauran, 32, has been on Medicaid most of her life, due to a series of disabilities including Crohn’s disease, endometriosis, and a degenerative joint disease. 

Dylan, 34, was uninsured prior to Medicaid expansion, and had not seen a doctor or dentist since he was 12. (Except, that is, for one emergency room visit in 2016 to remove his gallbladder after dealing with 18 months of pain.)

“For the first time, it wasn’t like we were trying to self-diagnose at home,” said Lauran, a mother of four. “It was just a breath of fresh air. The thought of losing it right now is just terrifying.”

Dr. Shannon Dowler, a board member of the American Academy of Family Physicians and former chief medical officer of NC Medicaid, knows that cutting Medicaid would have real impacts for many of her patients in Marshall, a town of about 850 people in Madison County.

“As someone who lives in a rural Appalachian community, I can tell you firsthand how devastating these cuts will be to rural populations, who saw the most significant benefit from expansion,” she said. 

Dowler worries that many of her patients will skip preventative care, which will lead to delayed diagnoses and serious health issues that could have been managed earlier. 

“In the end,” Dowler said, “these cuts would only increase health care costs and worsen health disparities across North Carolina.”

3. Medicaid coverage and programs are cut.

Nationally, Medicaid is funded in a lopsided way, with the federal government chipping in a larger share than the state in most cases. (Only a handful of states split the costs 50-50). Expansion coverage is even more lopsided at 90-10 with the government paying the larger share. 

States can cover their Medicaid share by taxing residents (unpopular) or by taxing health care providers like hospitals (much more popular). 

Hospitals pay the provider taxes, which the state then pays to the federal government to draw down federal Medicaid funds. Providers don’t mind paying the tax because it offers such a solid return on investment for the health of their communities, said Anthony Okunak, vice president of financial policy/services at the North Carolina Healthcare Association.

“These funds from the federal government have been the lifesaver of our rural and safety net hospitals,” he said. They’ve kept maternity wards open and doctors employed.

H.R. 1 would freeze the tax at 6 percent of provider revenue, while the Senate proposes incrementally cutting the rate until it reaches 3.5 percent in 2031. That change would result in the loss of billions of dollars for North Carolina.

In 2024, North Carolina hospitals paid $1.4 billion in provider taxes. That covered the state’s 10 percent bill for Medicaid expansion, helped pay for traditional Medicaid, and unlocked $7.1 billion in federal funds, according to the North Carolina Healthcare Association. 

A lower tax rate would, at a minimum, eliminate billions in Medicaid funds to rural and safety net hospitals and jeopardize a host of other provider-tax-supported Medicaid programs, Okunak said. Those programs include providing postpartum care to women for one year after the birth of their baby (which cost $24 million this year), giving raises to health care workers who provide home and community based services in the state ($140 million), and helping train the next generation of doctors ($63 million).

“I don’t think anyone ever saw this coming,” Okunak said. “Our safety net providers absolutely need these funds. They’re not going to get these funds anywhere else.”

4. Medicaid expansion recipients would have to verify eligibility twice a year.

Currently, North Carolinians on expanded Medicaid must prove their eligibility once a year. H.R. 1 would require recipients to go through that process every six months. (Regular Medicaid participants would still only have to do it once a year.)

“What we’re seeing is a lot of red tape and bureaucracy that is being added to the work that our people of North Carolina are now going to have to do, and to do more frequently,” said Jay Ludlam, deputy secretary for NC Medicaid.

The Congressional Budget Office reviewed the House bill and “expects that enacting the section would result in some people being removed from the program sooner than would occur under current law.” Nationally, this could result in 700,000 people being without health insurance by 2034. 

This change creates an administrative burden, both for those applying and those helping applicants, said Hollis Smith, deputy director of the NC Navigator Consortium, a federally-funded organization that helps residents learn about and apply for insurance through Medicaid or the ACA Marketplace. 

Often, people lose coverage not because they are ineligible, but because they didn’t submit the paperwork accurately or on time, she said. 

Last year, Smith and her 232-person team helped 124,000 people answer questions, compare health plans, and fill out application and renewal materials. Each one-on-one appointment can take 90 minutes.

Now, her team is hearing from people who are worried and confused about what’s going on in Washington. While they are doing their best to answer questions and remind callers the bill isn’t law yet, she’s not sure to what extent they will be able to offer this reassurance in the coming months; her organization is facing a 90 percent funding cut, going from a $7.5 million budget to $750,000 by the end of August. 

5. Adult, non-disabled Medicaid recipients must meet work requirements.

Medicaid eligibility has historically only been tied to income, not whether someone is working. However, the House bill would require non-pregnant, non-disabled adults ages 19-64 to work, volunteer, or be in school for at least 80 hours a month to qualify for benefits. 

The House bill includes an exception for parents with dependent children, while the Senate version requires adults with children over the age of 14 to work.

Up to 195,000 North Carolinians could lose coverage under these work requirements, according to an analysis by Urban Institute. Ludlam’s team estimates around 255,000. The Joint Economic Committee estimates even more at nearly 271,000.

North Carolina legislators already have a bill pending that says if the federal government mandates Medicaid work requirements, the state is ready to impose them.

In North Carolina, 92 percent of people on Medicaid are already working, said Ludlam. The other 8 percent likely includes people who are retired, have difficulty finding stable work or transportation, or struggle to navigate the bureaucratic paperwork and red tape, he said.

While cutting coverage may save some money now, health advocates say it really just pushes costs down the road.

Without insurance, Kinsley said, “People are not well, they defer preventative care, get sicker, visit the emergency department more, costs go up, providers don’t get paid, providers can’t employ people, and it’s a sick spiral all the way down.”

NOTUS reporter Emily Kennard contributed to this article. 

Sara Israelsen-Hartley, a journalist with a master’s degree in public policy, lives in Raleigh with her family. Read more of her work here.