More than 250,000 in NC may lose Medicaid coverage under new work requirements
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- North Carolina must enact modified federal Medicaid work requirements by Jan. 1.
- An estimated 250,000 North Carolinians, about 9% of enrollees, could lose Medicaid.
- State law requires monthly Medicaid eligibility verification, exceeding federal rules.
North Carolina has just six months to implement new Medicaid eligibility requirements after receiving final guidance this month. Implementing new federal work requirements and strict state mandates will be costly for the state and could lead to thousands losing health coverage.
More than 3 million North Carolinians rely on Medicaid. But according to Melanie Bush, deputy secretary for North Carolina Medicaid, an upwards of 255,000 of them who access Medicaid through expansion could lose health coverage when new federal work requirements from the One Big Beautiful Bill Act go into effect on Jan. 1.
The Centers for Medicare and Medicaid Services published its Medicaid eligibility requirements on June 1, giving states just months to create new systems and train staff to accommodate the new work requirements. The CMS work requirements were altered from those that appeared in the One Big Beautiful Bill Act, halting some of the progress NCDHHS had already made to meet federal compliance.
Bush said in an interview with The N&O that she fears the new requirements are too complex and will leave people unsure about their coverage.
“This is the biggest change to Medicaid eligibility ever,” Bush said. “It is incredibly confusing, and it is frustrating how confusing it’s going to be. There are going to be people who think that they have to go to work. There are going to be people who think that they’re exempt from work.”
Medicaid is supported from federal and state funds. Currently, working is not an eligibility requirement in North Carolina.
Medicaid enrollees will have to prove that they are working, volunteering or attending school for a minimum of 80 hours a month to keep their coverage. They can also combine hours from the different activities.
Who’s exempt from working under Medicaid?
Medicaid enrollees who fall under one of several classifications could be exempt from working, including medically frailty. Currently, NCDHHS determines medical frailty using clinical data.
But under the new law, an individual’s capacity to work would be decided based on whether the state determines that their medical condition prevents them from working, Bush said.
“We ... were not necessarily considering medical frailty to be necessarily defined by the ability to work. We were going to use a lot of diagnosis codes for things that we would consider someone medically frail and that would exempt them from work requirements,” Bush said.
This new method of verifying someone’s capacity to work has required the state to develop new systems that incorporate more automated data to help determine eligibility, Bush said. This infrastructure would cost the state tens of millions of dollars, The N&O previously reported.
The White House said that changing requirements to the nation’s healthcare assistance program would eliminate “waste, fraud, and abuse.”
Lucy Dagneau, senior director of state and local campaigns at the American Cancer Society Cancer Action Network, said she’s concerned that states across the country are forced to rush implementation, which may cause some people to fall through the cracks.
Bush expects that the state will meet federal compliance by the January deadline but said, “we would love more time.”
More state mandates in NC, hopes for funding
North Carolina’s legislature passed a bill to fund Medicaid through the end of June to complete the fiscal year. But lawmakers also mirrored some of the language of new federal Medicaid requirements in the bill and added stricter mandates on top of the federal demands.
One of the costliest requirements is that NCDHHS must verify each Medicaid enrollees’ eligibility monthly, rather than quarterly as the state has been doing. Federal requirements call for monthly documentation of work requirements to be checked at least every six months. This, Bush said, would “quadruple” social service workers’ workload.
She worries that county social service workers may not be prepared in time for the changes because the state has had to wait on the release of the final federal requirements to create training materials. Bush said that although the legislature gave NCDHHS the funds to implement these systems and hire more staff, she worries that counties may not be able to hire staff fast enough to keep up with the workload that comes with the new mandates.
“We have been talking with legislators about our concerns about that provision specifically,” Bush said. “We’re trying to educate our members to help them understand that it would be incredibly costly to do on a monthly basis and that it would probably result in a backlog of redeterminations which would end up costing the state more money.”
Dagneau said that North Carolina is among few states that have mimicked new federal Medicaid laws in state legislation, which she said is “damaging.”
“Enrollees (in North Carolina) are going to struggle more than enrollees in other states because North Carolina chose to require some policies that are even more burdensome than we’re seeing nationwide,” Dagneau said.
Though lawmakers have only passed a funding package for Medicaid until the end of the month, Bush said that she is optimistic that Medicaid will be sufficiently funded in the state’s upcoming budget.
The Republican-controlled state legislature has yet to pass its nearly one-year overdue comprehensive state budget, which is expected to contain Medicaid funding.
“I think that from what I’ve heard in my discussions with lawmakers, they are committed to passing a budget for Medicaid and for the entirety of state government,” Bush said. “I think they understand what our needs are, and they have been very receptive to understanding … the implications if it’s not passed again like it was last year.”
Informing Medicaid recipients about changes
Lori Kelley, 59, is a Medicaid enrollee who lives in Harrisburg who said that she is unclear on where she’ll stand come January. Kelley said that because much of her work is seasonal, she’s unsure if she’ll meet the requirements, though she works at least 20 hours a week when she does have work.
To prevent widespread confusion, Bush said that NCDHHS hopes to begin communicating information about the changes “as soon as possible” to prevent confusion.
“I don’t really understand how all this is going to work,” Kelley said. “It’s not like they provide you with a liaison that sits you down that says, ‘Okay, so here’s how it’s going to change. Here’s what you need to do.’ You pretty much need to navigate it for yourself.”
Kelley said that finding work is difficult because she must rule out any roles that require using a computer because of her vision loss. This limits her primarily to manual labor jobs, which has become difficult as she continues to age with arthritis, she said. Kelley also has resistant hypertension and said that she likely wouldn’t have discovered her condition without Medicaid.
NCDHHS is creating a stakeholder toolkit to share with enrollees, advocacy groups and other stakeholders, Bush said. Disseminating information using these community resources has brought them success in this past during Medicaid expansion and continuous coverage unwinding.
