(The Center Square) – Nearly two years after North Carolina expanded its Medicaid program, an additional 685,000 state residents have enrolled in the program, a top official in the program told a state legislative panel Tuesday.
However, the program faces an uncertain future with rising costs, lower funding and a new federal work requirement, Jay Ludlam told a joint legislative committee on Tuesday. He’s the state’s deputy commissioner for Medicaid.
The One Big Beautiful Bill Act, signed in July by second-term President Donald Trump, will impose a work requirement on some Medicaid recipients and it will require states to reverify eligibility for recipients twice a year instead of annually, Ludlam told legislators.
“We do foresee the real risk that potentially hundreds of thousands of people may lose coverage,” Ludlam said.
State officials may also have to ask the Legislature for funding to cover administrative costs in enforcing the regulations of the new federal law, he added.
The federal government covers 90% of the cost of Medicaid in North Carolina, with the remaining 10% covered by an assessment on hospitals.
During the COVID-19 era, federal funding for Medicaid increased and the program actually had a surplus which went back into the state treasury, Ludlam said. But those enhanced payments increases have since been rescinded.
Medicaid providers, like all health care providers, are facing pressure from inflation, including higher wages for staff members and new treatments and drugs, said Julia Lerche, the state Medicaid’s chief strategy officer and actuary. In recent years, health care costs have grown much faster than the nation’s gross domestic product she said.
“I think you all know Medicaid does not operate in a vacuum,” Lerche told legislators.
Medicaid costs nationally, however, have increased at a slower rate than both Medicare and private insurance, she said.
In August, the state’s Department of Health and Human Services notified legislative leaders that it needs $319 million in additional state funding or it will have to make cuts to Medicaid, including lower payments to providers.
“Despite careful efforts to minimize harm, the reductions now required carry serious and far-reaching consequences,” the letter said. “Most immediately, reduced rates and the elimination of services could drive providers out of the Medicaid program, threatening access to care for those who need it most.”
