North Carolina lawmakers gave their approval Tuesday to a bill to provide $319 million more in funding needed to keep the state’s Medicaid program running through June.

The bill, which was released on the first day back in session last week, spans 33 pages and goes significantly beyond Medicaid funding and into policy. That includes language to align the state with federal law passed under the Trump administration, requiring Medicaid beneficiaries to work or participate in community service beginning Jan. 1, 2027, as well as provisions to tighten oversight of the program, curb spending, and limit access to the insurance program for immigrants.

The bill was released as a conference report, meaning House and Senate Republican negotiators reached a final compromise version that replaces earlier competing versions they did not agree on. The bill could not be amended and faced an up-or-down vote in both chambers. It passed both chambers with bipartisan support.

The bill now goes to the governor’s desk. There, the governor can sign the bill into law, veto it or let it pass without his signature.

The bill received nearly unanimous approval last week in both the House and Senate.

Rep. Pricey Harrison, who was the only House member to vote against the bill during those initial votes last week, said on Tuesday that, “while I really appreciate the effort to fix the Medicaid problem, it came with a bunch of problematic provisions.”

She referenced a letter sent to lawmakers by a coalition of about 50 organizations, including the ACLU of North Carolina, Action NC, the North Carolina Justice Center, El Pueblo, and MomsRising. The groups oppose several provisions in the bill and called on lawmakers to pass a “future cleanup bill.”

“The administrative burdens from many of these changes will especially impact North Carolinians with disabilities and those in rural areas who may experience greater difficulty obtaining and returning required paperwork, causing eligible individuals to lose needed health coverage,” the letter states.

“This conference report also further limits insurance options for pregnant women and children and could result in immigrants who have legal status being unnecessarily reported to ICE,” the groups said in the letter.

A deal to provide additional state funding for Medicaid, which covers more than 3 million North Carolinians and is jointly funded by the federal government and the state, had eluded the Republican-led House and Senate since last summer as lawmakers disagreed on policy provisions to include within the bill. Lawmakers had also initially disagreed with Democratic Gov. Josh Stein and his administration’s $319 million estimate, pointing instead to lower figures from the General Assembly’s Fiscal Research Division. They also pushed back after Stein’s administration implemented cuts to provider reimbursement rates in response to the shortfall, which were later reversed following lawsuits by providers and health care recipients.

Details on provisions

Provisions to tighten oversight of the program include $500,000 set aside for the state auditor to review North Carolina’s Medicaid program and NCWorks Career Centers, which help connect job seekers with employers. Stein had requested a similar amount in a budget proposal for the Medicaid Investigations Division within the state Department of Justice, run by Democratic Attorney General Jeff Jackson. In an oversight hearing earlier this month on whether the state was proactively identifying and prosecuting fraud in the program, Jackson also requested funding for a data-mining position in his office.

The bill requires Medicaid eligibility reviews to be conducted monthly instead of quarterly, bars the use of self-attestations as proof of eligibility for Medicaid and the Supplemental Nutrition Assistance Program, and establishes a three-month work-history requirement before Medicaid eligibility, compared with a one-month federal requirement. It would also set annual Medicaid copayments at the maximum allowed by federal law.

Additional provisions impose new restrictions on how applied behavior analysis therapy — used to help autistic children build communication, social, and daily living skills — is delivered and billed under Medicaid. These include limits on telehealth services, requirements for more in-person oversight, and caps on treatment hours without state approval.

That follows a hefty jump in costs associated with ABA, with state health officials previously estimating related costs could reach $1.1 billion by fiscal year 2027. Costs were $121.7 million in the 2022 fiscal year. Jumps in costs are happening nationwide, with reports indicating independent clinics have been largely bought up by private equity firms.

One immigration-related provision would require the state Department of Health and Human Services — with eligibility handled by county departments of social services — to refer any Medicaid applicant or recipient whose citizenship or “satisfactory” immigration status cannot be verified to the U.S. Department of Homeland Security for investigation and enforcement. That referral would occur after a “reasonable” opportunity (though no specific timeframe is defined) is provided to verify status, or if, upon receipt of verification, the individual is found not to have proper documentation. That provision would take effect in October.

Another would cut Medicaid coverage for thousands of lawfully residing immigrant children and pregnant individuals.

The federal legislation from July already restricted immigrants’ access to Medicaid, limiting coverage to green card holders and certain Cuban and Haitian immigrants. But a federal waiver, which North Carolina uses, allows states the option to provide coverage for lawfully present pregnant women and children, including those from the excluded groups. The Medicaid deal would prohibit the state from covering anything other than what is required by federal law, eliminating North Carolina’s ability to continue using the waiver. That blocks children and pregnant women who are green card holders within a required 5-year waiting period, refugees, asylum seekers and others from accessing that care, according to an email shared by DHHS with The News & Observer that was sent to lawmakers Thursday with concerns about the bill.

“These points are being flagged proactively in case they may be helpful when considering future adjustments after passage, and we will continue to flag other matters as we identify them,” the email sent to House health committee chairs says.

A DHHS spokesperson told The N&O that North Carolina Medicaid is currently covering approximately 27,000 lawfully residing children and pregnant individuals. Of those, 26,193 are children and 505 are pregnant women.

Asked about projections regarding Medicaid funding needs for fiscal year 2026, a DHHS spokesperson said the department is working with the North Carolina General Assembly to “ensure Medicaid is fully funded” for the current fiscal year and is developing budget assessments for future years, but declined to comment on specific projections at this time.

“NCDHHS remains focused on ensuring people continue to receive appropriate, effective and necessary care and services while navigating system-wide cost pressures. Rising costs are being driven by higher prices, increased utilization and more complex care needs across the entire system. This is not unique to just Medicaid, it is health care system wide,” said the spokesperson.

Medicaid expenditures by the state have risen from $3.9 billion in fiscal year 2021 to $6.1 billion in fiscal year 2025.

Medicaid expansion — which was enacted in 2023 and gave more than 700,000 North Carolinians access to coverage — is funded by the federal government at 90%, with the remaining 10% covered through hospital assessments that are later indirectly reimbursed by the federal government. A provision in the Medicaid expansion law explicitly prohibits the state from picking up that 10% cost.

Costs are still rising for the Medicaid expansion population. Costs per Medicaid expansion enrollee are projected to rise by about 40% in fiscal year 2027, according to DHHS, which said the increase reflects updated estimates based on actual use of care. DHHS said this type of adjustment is standard and that the increase does not translate into a 40% rise in the hospital assessment, which continues to cover the state’s 10% share; instead, the year-over-year increase in the hospital assessment is approximately 8%.

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