Once frugal NC Republicans now want to take a credit card approach to health care funding | Opinion

“We cut taxes” is the rallying cry among North Carolina Republican lawmakers, but a close second is their claim to be frugal stewards of state spending.

That stewardship appears to be slipping as Republicans duel with Democratic Gov. Josh Stein over how to handle spending on Medicaid, a federal-state health insurance program that covers more than 3 million North Carolinians.

Stein, worried by the Republicans’ delay in fully funding the program, has ordered cuts in payments to Medicaid providers to stretch the available funds. Republicans are saying no cuts are needed – “Spend now and we’ll fully fund Medicaid later.”

The legislature did pass a “mini budget” over the summer that provides $600 million to support basic Medicaid funding known as the Medicaid rebase and the Medicaid oversight fund, but the amount is $319 million short of what’s needed through the end of fiscal year on June 30. Rather than cut services, the state reduced its payments to Medicaid providers by 3% to 10% to offset the shortfall. The reductions took effect Oct. 1.

Rep. Erin Paré, R-Wake, a member of the House’s budget writing team, took to X last week to say Stein overreacted to a delay in full Medicaid funding as a political move to pressure Republicans.

“On October 9th, the Governor’s own Department of Health and Human Services affirmed in a letter to the House Health Chairs that the Medicaid Rebase is projected to be sufficiently funded through at least April 2026, yet he went ahead and cut provider reimbursement rates anyway,” she said. “There is no reason for him to do this other than a purely political maneuver.”

Dev Sangvai, secretary of the state Department of Health and Human Services, said the state doesn’t have the option of taking a credit-card approach to funding Medicaid.

“Just like any household budget, we must make decisions based on the resources we know are available, not those we hope to receive,” he said in a statement reported by Newsline. “And under North Carolina law, the state is required to maintain a balanced budget, meaning we cannot spend money knowing we will run out well before the end of the fiscal year.“

The governor’s office said in a statement on Wednesday that “hope is not a strategy. Without concrete assurance that legislators will be able to set aside their disagreements, DHHS cannot spend money it does not have.”

When I asked Paré about the risk of the extra funding not coming through, she wrote back that there’s no cause for worry.

“We clearly have time and the path to get this done and we will,” Paré said. “The Governor threw in the towel way too early at the expense of the Medicaid population. There is no other explanation than this is another political play from the Governor, and that’s just sad.”

Actually, it’s Republicans who have thrown in the towel way too early. With the Republican-controlled state House and Senate unable to agree on a state budget, lawmakers have gone home with no votes planned for the rest of the year.

With President Donald Trump’s “big beautiful bill” shifting funding burdens from the federal government to the states, it’s unclear how much leeway North Carolina lawmakers will have when it comes to fully funding Medicaid. Stein is right to ration Medicaid spending until – if ever – full funding is approved.

The governor made that clear to Republicans in a letter. “We cannot continue spending resources we do not have,” he wrote. “Asking NCDHHS to delay reductions and continue Medicaid spending at an unsustainable rate puts the State at serious financial risk.”

Stein continued, “While rate reductions and service cuts are devastating, the alternative of running out of money in excess of $300M and seriously jeopardizing Medicaid coverage for millions of North Carolinians is not an option.”

That Republicans are urging the governor to spend now with the promise of finding the money later is a sharp departure from their conservative approach to state finances.

It’s certainly a departure from what Paré was saying on X in February 2024. She wrote: “In North Carolina, we balance our budget, we cut taxes, we are fiscally responsible, and we save smartly for the future. NC Republican policies are a model for fiscal responsibility in government.”

But now Republicans can’t pass a budget let alone balance one. And their model for fiscal responsibility has expanded to include a startling new concept: Spend now, pay later.

Associate opinion editor Ned Barnett can be reached at 919-404-7583, or nbarnett@newsobserver.com

This story was originally published October 29, 2025 at 12:06 PM.