Sweeping federal restrictions on Medicaid, the government-funded health insurance program that covers one in every four North Carolinians, are about to take effect.
Recently described by Melanie Bush, head of NC Medicaid, as “probably the most significant changes in the history” of the program, the provisions are part of H.R. 1, the budget reconciliation law signed last summer by President Donald Trump (also known as the One Big Beautiful Bill Act). Those provisions will limit the number of people eligible for coverage and create new hurdles for adults who still qualify.
The first major change is set to go live on Oct. 1. It will narrow Medicaid eligibility for noncitizens, cutting off coverage for most lawfully present immigrants unless they
hold a green card or qualify for an exemption.
Data from the N.C. Department of Health and Human Services showed that in this state, more than 66,800 documented noncitizens were enrolled in Medicaid at the end of August. About 32 percent of them were children, pregnant women or members of other groups that will be exempt from the rule.
Undocumented noncitizens are not eligible for Medicaid in North Carolina.
The more far-reaching change will arrive a few months later on Jan. 1, when most adults covered by Medicaid expansion must begin to prove they are working, attending school or participating in other approved activities in order to remain enrolled.
As many as 345,600 people could fall off the rolls in North Carolina in connection with the requirement, according to an analysis published in March by the Robert Wood Johnson Foundation. Much of that drop-off is expected to come not from people who are actually ineligible, but from eligible enrollees being tripped up by paperwork and reporting requirements.
To help make sense of it all, here are answers to questions you may have about the changes.
Which noncitizens are exempt from the new federal policy that rolls out Oct 1?
Medicaid coverage will remain available to the following noncitizens.
- Lawful permanent residents with green cards
- Children without permanent immigration status who are younger than 19
- Women without permanent immigration status who are pregnant or who gave birth within the past 12 months
Cuban and Haitian entrants are also covered, as are residents of the U.S. who are citizens of the Freely Associated States — Micronesia, the Marshall Islands and Palau.
Which noncitizens are no longer covered?
Anyone who doesn’t fall into one of the categories above. That includes refugees, people who have been granted asylum, survivors of human trafficking and people with Temporary Protected Status, among other groups.
NC DHHS began sending notices to noncitizens who might be affected earlier this summer. During a live Q&A on Sept. 7, Medicaid Director Melanie Bush encouraged beneficiaries who believe they are at risk of losing coverage to “schedule your appointments and refill your prescriptions” before Oct. 1.
How can those noncitizens access care after the rule takes effect?
In a crisis, these folks may still qualify for a limited form of Medicaid that covers the cost of medical emergencies handled in a hospital’s emergency room, regardless of a patient’s immigration status.
Bush said this safety net, known as Emergency Medicaid, is meant for conditions like a “heart attack, stroke or serious accident.” It does not cover urgent care.
Many community health centers and free clinics also provide care at a low cost or on a sliding scale, depending on your ability to pay, regardless of immigration status. That makes these clinics a potential option for people who lose coverage.
What is the Medicaid work requirement?
This provision of H.R. 1 affects the 40 states that expanded access to Medicaid under the Affordable Care Act, which North Carolina did in late 2023.
Expansion raised the income limit for eligibility, which previously was very strict and limited coverage for most adults. The policy, enacted in December 2023, extended coverage to many low-income adults who previously made too much money to qualify. Nearly 735,000 people in North Carolina have signed up for Medicaid through expansion, according to state data.
Beginning Jan. 1, most of those beneficiaries will have to show that they’re working, in school or volunteering for at least 80 hours a month to keep their coverage.
People with a household income of at least $580 a month before taxes can satisfy the requirement without working 80 hours a month. That’s about what someone earning minimum wage would earn if they worked 80 hours a month. This keeps self-employed people with irregular hours in compliance.
Who is exempt from the requirement?
Several groups are excluded from the rule, including:
- Adults with disabilities
- Parents and caretakers of dependent adults with disabilities
- Parents and caretakers of dependent children younger than 14
- Women who are pregnant or were pregnant within the last 12 months
There is also an exemption for adults with illnesses that make them “medically frail,” but it will only apply to people who can demonstrate that their condition prevents them from working.
NC DHHS plans to publish a comprehensive list of exemptions before the requirement takes effect.
Who is at risk of losing coverage?
Anyone who doesn’t meet the work requirement and doesn’t qualify for one of the exemptions could lose Medicaid.
However, NC DHHS has repeatedly noted that the vast majority of adults who enrolled through expansion are either already working or unable to work. This means the reporting burden for beneficiaries (more on that later) may be a bigger threat than noncompliance.
How can people who are subject to the new requirement satisfy it?
Beneficiaries have two ways to satisfy the rule. The state will first check whether a person’s household brings in at least $580 a month, factoring in income from a spouse or other household members and, in some cases, non-job sources like unemployment benefits. Having an income below that level means that someone qualifies for Medicaid under the state’s original strict criteria.
Seasonal workers can also qualify if their income averages out to that earning threshold over the previous six months.
While the federal requirement imposes a new minimum income for eligibility, the state’s maximum income limit for coverage under expansion remains the same. Under that limit, a beneficiary cannot earn more than 138 percent of the federal poverty level, or about $1,835 a month, unless they are pregnant or have a disability.
Anyone who doesn’t meet the income test will instead need to log 80 hours a month of qualifying activity. That can include working, searching for a job through an approved program, attending school at least half time, or volunteering with a nonprofit or public organization — including court-ordered community service.
Multiple activities can be combined to reach 80 hours, though job-search efforts can only count for up to 40 hours.
How will people prove they are in compliance?
The state will notify beneficiaries whether they’ve met the requirement or qualify for an exemption, drawing on existing data where it can. When that’s not enough, local departments of social services may ask for supporting records, such as pay stubs, school enrollment documents or volunteer logs, according to Bush.
Compliance will be checked twice a year, replacing the current renewal process for Medicaid which has only taken place once a year. Beneficiaries will need to meet the work or activity requirement for at least three of the six months preceding each redetermination. Someone renewing in July 2027, for example, would need to have qualified for any three months between January and June of that year.
Those months do not have to occur consecutively for beneficiaries who were already enrolled. However, new applicants will be required to show they were working for three back-to-back months before they applied in order to qualify.
Bush stressed the importance of keeping contact information current with local DSS offices, since notices requiring a response will go out by mail, and cautioned that missing a deadline could mean losing coverage.
New Medicaid applicants will face a similar look-back requirement starting Jan. 1, needing to show they met the standard in the three months before they applied.
Why are these changes happening?
Republican lawmakers who wrote H.R. 1 have argued that tying Medicaid to work will encourage employment and rein in a program that now costs the federal government hundreds of billions of dollars a year. They’ve also pointed to concerns about fraud and improper payments as justification for tighter eligibility checks.
Critics, including many Democrats and health policy researchers, counter that most Medicaid recipients who can work already do, and that similar requirements tried in other states mainly stripped coverage from eligible people rather than pushing anyone into a job.
Unlike most of the other affected states, eligibility determinations in North Carolina are handled at the county level. This means the weight of implementing the requirement will fall largely on local social workers.
This article originally appeared on Asheville Citizen Times: New federal rules will reshape Medicaid in NC. Here’s what to know.
