Just weeks after President Trump signed his Big, Beautiful Bill into law, the New York Times ran a lengthy story with an emotional headline about Medicaid in North Carolina. Long on subjectivity and short on logic, the article blames Medicaid’s financial woes on a law that hasn’t even gone into effect yet. With Gov. Josh Stein joining in the pile-on, it seems obvious that the left is planning to blame Medicaid’s looming problems on President Trump. But the finger-pointing and excuse-making by Democrats and their media allies could not be further from the truth.
Here are the facts. Medicaid in North Carolina has been in poor financial shape for decades. In fact, it was even in bad shape before ObamaCare expansion, which has proved devastating for the program. Before expansion, Medicaid was already a larger percentage of the state budget than in most other states. Now it is the 11th-highest in the country and significantly higher than in neighboring states like South Carolina, Georgia, or Tennessee.
These high costs are not an accident or a coincidence: They are a direct result of years and years of bad policy choices by North Carolina politicians.
After the pandemic, North Carolina intentionally decided not to check the eligibility of nearly all of its Medicaid recipients. For all we know, there could have been hundreds of thousands of ineligible people receiving Medicaid in North Carolina.
In 2023, North Carolina expanded Medicaid eligibility to able-bodied adults above the poverty line — well after 39 other states had done so. By then, one in five North Carolinians was on Medicaid. Expanding Medicaid eligibility placed a massive new burden on an already struggling program. The number of new enrollees included 200,000 more able-bodied adults than the state had projected, leading to an additional $1 billion — or about 50% more — in unexpected costs. Now Medicaid takes up about 40% of North Carolina’s budget, taking away resources that could go to other priorities like education, roads and bridges, and cutting taxes.
States that have expanded Medicaid have seen their rural hospitals burdened with a crush of new patients — and without a similar surge of new doctors. Medicaid generally reimburses doctors and hospitals at a lower rate than private insurance and Medicare do, but not in North Carolina. The state’s Medicaid reimbursement rates are much closer to commercial costs than other states, which can result in higher commercial rates for everyone and leaving Medicare recipients with fewer options, as providers would prefer to accept Medicaid enrollees instead.
President Trump is now trying to fix the program to make it financially viable. The president’s new law — which goes into effect by the end of next year — does that in two ways: by ensuring the removal of ineligible people from the program and by requiring able-bodied adults without young kids to either work, learn, or volunteer at least part-time. This will shore up North Carolina’s finances by overcoming the state’s unwillingness to scrutinize eligibility.
Even before North Carolina expanded Medicaid eligibility, the state had the highest rate in the country of able-bodied Medicaid recipients who were not working. States like Arkansas have shown that getting Medicaid recipients back to work often results in a large number of them earning enough income to come off of the program entirely, improving their lives and saving the program for those who are unable to work.
Democrats and their media supporters claim that President Trump’s law will hurt North Carolina because of its crackdown on provider taxes. But these taxes are blatantly corrupt: States tax health care providers only to use the same funds to pay them back for Medicaid services — costs that are reimbursed by the federal government. It is a blatant scheme to bilk free money from the federal taxpayer. States need better and more stable funding sources for Medicaid than through kickbacks.
More needs to be done to fix Medicaid and to fix America’s health care system in general. No one, whether Republican or Democrat, would deny that North Carolina’s Medicaid program is in rough financial shape. And these new federal changes from the Big Beautiful Bill are a big step in shoring it up.