By Jaymie Baxley and Anne Blythe
On Tuesday evening, just days after President Donald Trump signed into law the new federal budget passed by Congress, several dozen people took a seat in the Pullen Park Community Center in Raleigh.
Two of the capital city’s Democratic state lawmakers — Sen. Jay Chaudhuri and Rep. Tim Longest — were holding a town hall with Heba Atwa, director of legislative advocacy and campaigns for the nonprofit, nonpartisan NC Budget and Tax Center.
The sweeping legislation, which GOP legislators named the One Big Beautiful Bill Act, was top of their agenda. It significantly cuts Medicaid and food assistance programs while cutting taxes for the wealthiest and having many other impacts on health and safety net programs.
Trump has described the new law as “a once-in-a-generation piece of legislation that makes good on his campaign promises and puts America first.” His critics quickly point out that it also breaks his promise that “we’re not cutting Medicaid.”
In North Carolina, elected officials, state policymakers, administrators and others are working to boil down the thousand-plus pages into plainspoken snippets that might be easier for the public to understand.
Devdutta Sangvai, secretary of the state Department of Health and Human Services, spoke bluntly last week, just hours before the U.S. House of Representatives took their 218-214 vote on July 3 to concur with the U.S. Senate’s version of the bill.
The barriers to food and health care, Sangvai warned, would have far-reaching consequences that will “show up elsewhere in our schools, our justice system and our housing programs.”
“These changes would hurt not only individuals and families, but also North Carolina’s economy and workforce,” Sangvai said during a July 1 news briefing. “When people can’t meet basic needs, we all feel the impact.”
How quickly the state will feel the impact is not yet clear — the new law cuts Medicaid, adds work requirements to the program and creates administrative changes that will be phased in mostly after the 2026 elections.
With the state budget process at a stalemate, it’s not clear whether the General Assembly will adopt a fiscal plan that has the state taking on any of the financial burden resulting from federal cuts to safety net programs. If the state doesn’t choose to shoulder those costs, then the financial strain and hardships could end up in the laps of counties, some of which might resort to raising property tax rates to generate the revenue needed, Atwa explained.
‘Billions of dollars in lost funding’
Those were just some of the issues that came up at the town hall held Tuesday by Chaudhuri and Longest.
“Fiscal policy is foundational to well-being and to the things that we care about — and to our day-to-day lives,” Atwa told the crowd. “I think that’s becoming clearer and clearer to all of us.”
As she flipped through slide after slide, Atwa added: “These federal cuts are going to hurt North Carolina, they’re going to hurt people’s well-being, they’re going to hurt our economy.”
Here’s the shorthand, according to the governor’s office:
More than half a million people stand to lose their health care because of changes to Medicaid and the Affordable Care Act Marketplace.
Changes to the Supplemental Nutrition Assistance Program, or SNAP, could leave 1.4 million North Carolina residents — 600,000 of whom are children — without food assistance.
Tens of thousands of the 100,000-plus North Carolinians employed in the clean energy industry could lose their jobs due to the loss of clean energy tax credits.
Some households could see their annual electricity bills increase by 18 percent because of the removal of tax credits for solar and wind energy.
Gov. Josh Stein, a Democrat, called the megabill — supported by every congressional Republican from North Carolina with the exception of U.S. Sen. Thom Tillis — a “disgrace.”
Tillis made national news last week when he balked at supporting the Senate version of the federal budget legislation. Part of his rationale was what it would do to health care in his state.
“It would result in tens of billions of dollars in lost funding for North Carolina, including our hospitals and rural communities,” Tillis said in a statement before announcing the next day that he would not seek reelection in 2026. “This will force the state to make painful decisions like eliminating Medicaid coverage for hundreds of thousands in the expansion population, and even reducing critical services for those in the traditional Medicaid population.”
What’s happening with Medicaid?
One of the law’s most consequential provisions is a work requirement for Medicaid.
Beginning Dec. 31, 2026, most able-bodied adults participating in the government-funded health insurance program must prove they are working, attending school or volunteering for at least 80 hours a month. State officials estimate that more than 255,000 North Carolinians will lose coverage under the requirement, with many of them being kicked off the rolls — not because they’re unemployed, but because of red tape and paperwork.
Jay Ludlam, head of Medicaid for North Carolina, said implementing the requirement will force the state to develop a costly, complex new system to check beneficiaries’ employment status. It will also increase strain on local and county Department of Social Services offices, many of which are already struggling with large backlogs of cases and staffing shortages.
“The concern in North Carolina is that the support that county offices are going to need, the testing that they’re going to need and the time frames that they’re given will just simply be insufficient,” he said. “Working, predominantly rural North Carolinians will lose coverage and will lose their eligibility that they otherwise would have had because of these time frames and extra burdens that are put on North Carolina.”
The law does not provide the state with federal funding to implement the work requirement. In fact, it limits North Carolina’s ability to offset the requirement’s cost by reducing the cap on taxes the state imposes on providers to draw down federal matching funds for Medicaid.
North Carolina currently collects a 6 percent tax on providers’ net revenue from patients. The law lowers the rate to 3.5 percent, which Ludlam said will result in billions of dollars in lost funding for the state.
The combination of the work requirement and lower provider tax cap, he said, will likely undo the expansion of Medicaid that North Carolina lawmakers approved in 2023.
Expansion increased the state’s previously strict income threshold for Medicaid up to $21,597 for an individual or $36,777 for a family of three. This opened the program to many low-wage workers who previously made too much money to qualify. More than 673,000 people, or about 21 percent of the state’s total Medicaid enrollment, have gained coverage through the measure.
Ludlam said all of those beneficiaries are now at risk of losing coverage because of a financial “trigger” that the N.C. General Assembly tied to its passage of expansion. The Access to Healthcare Options Act includes a clause that discontinues expansion if the state is forced to pick up any costs.
“We use provider taxes to help pay for the administrative costs of expansion,” Ludlam explained. “We are not permitted under local statute to pay for those costs using state general funds. Therefore, there’s only one way to really get it, and that is through these provider taxes.”
The loss in taxes, he said, leaves the state with “few financial mechanisms to pay for” expansion, let alone the cost of checking the employment status of expansion beneficiaries, effectively tripping the trigger.
Maintaining expansion will require intervention from the state legislature, which will need to modify or get rid of the clause. A potential fix has been proposed by Rep. Sarah Crawford (D-Raleigh), who in March introduced a bill that would “eliminate the statutory trigger for discontinuation” of expansion.
“I think my bill is certainly one way forward,” she said in an interview with NC Health News. “We’re talking about the livelihoods of over 650,000 people, and I’d like to believe that my colleagues in the legislature understand the impact that expansion has had on the lives of people.”
But Crawford’s bill has not moved since she introduced it, and there’s no guarantee that a majority of state lawmakers will support the trigger’s removal. State Rep. Donny Lambeth (R-Winston Salem) has said the General Assembly would not have approved expansion in the first place without it. In conversations with NC Health News, he has also said there’s likely little appetite in his caucus for changing the trigger.
Taking away food benefits
In North Carolina, there are more than 1.4 million participants in the SNAP program, Karen Wade, the state Department of Health and Human Services policy director, said during the July 1 media briefing. The federal legislation expands work requirements that already are part of the program, she added.
“Our programs serve a range of populations, including older adults, veterans, individuals with disabilities and children, and it’s also important to note that these are working families, with an average of 80 percent of SNAP households including someone who’s working,” Wade said.
Since SNAP’s establishment as a countrywide program 50 years ago, the benefits have been 100 percent federally funded. Wade noted, though, that the new federal law shifts hundreds of millions of dollars annually in costs to the state and counties in North Carolina — “a new unprecedented mandate.”
That could add at least $425 million in new costs for the state under the final version of the law. The state is also on the hook for an additional $65 million for program administration — now that the law increases the state’s responsibility from 25 percent to 50 percent.
The state now faces tough choices, which could include:
Shifting state budget funds to cover the federal gap.
Reducing enrollment to lower costs.
Withdrawing from the SNAP program.
If the state were to withdraw from SNAP, Wade told reporters on July 1, “hunger and poverty would increase, along with worsening health outcomes.”
“SNAP is also an important economic driver to our state,” Wade added.
According to DHHS estimates, North Carolina stands to lose $2.8 billion in annual federal funds that generate $4.2 billion in economic impact. Rural grocery stores that depend on SNAP for revenue would be at risk of closure, and jobs generated by those would be at risk across the state.
Administrators of food assistance programs that rely on SNAP funds have said private philanthropy will not be able to make up the difference.
“There’s no amount of fundraising that we can do that’s going to make up for the funds we’ve lost,” Melissa Driver Beard, executive director of CORA, a Chatham County food assistance program, told NC Health News last month. “At some point we can’t accommodate everything.”
More care at stake
While much of the focus has been on what the federal bill does to Medicaid and SNAP, other parts of it will affect nursing homes, Planned Parenthood funding and Affordable Care Act insurance premiums.
Kody Kinsley, the state’s former DHHS secretary, told NC Health News on Wednesday that while many refer to this “bill, now law” as a comprehensive budget, “it’s also a sweeping health care bill.”
One thing not in the new law that could have a major impact on who remains insured in North Carolina is whether the enhanced Affordable Care Act premium tax credits that have been in effect since 2021 will be allowed to sunset. While the bill doesn’t address the fate of the premium tax credits, it does include provisions that tighten eligibility requirements through requiring more verification.
If those credits expire, Kinsley, who is working as senior policy advisor for Johns Hopkins University now, along with other health care policy analysts say insurance premiums are likely to skyrocket. That could lead to an estimated 250,000 North Carolinians who buy coverage on the ACA marketplace losing coverage because they won’t be able to afford insurance, Kinsley estimated in a piece he cowrote for progressive think tank The Century Foundation.
Kinsley used an example of a retired couple, both 60 years old, who make a combined $82,000 a year. Their premiums would increase by $19,000 a year without the extended tax cuts, forcing a decision that would lead many to abandon coverage.
The federal legislation, Kinsley said, will erase a lot of progress that North Carolina made in an effort to extend health care to hundreds of thousands more people.
“We’re definitely going backwards,” Kinsley said. “We’re looking down a sad road.”
Messaging for the people
“Sad” was the mood at the town hall in Raleigh Tuesday night.
Many in the audience, though, urged each other to keep calling and writing their lawmakers at the state and federal level in attempts to make their voices heard. Several suggested that all their calls could have played a part in Tillis being unwilling to go along with his Republican colleagues in the Senate.
Chaudhuri and Longest also encouraged the audience to share what they learned at the town hall with others — particularly in rural areas — who might not be as well-versed about what’s in the sweeping legislation.
“I think we’re in one of those moments where it is very chaotic,” Chaudhuri said. “But with the chaos we have to find opportunity. And I like to think there are things we can do.”
Republish This Story
Republish our articles for free, online or in print, under a Creative Commons license.