By Anne Blythe, Ashley Fredde and Rose Hoban
Lawmakers voted for a $319 million package on Wednesday to fully fund the state’s Medicaid program through the end of the fiscal year, settling a monthslong feud with the governor over how much it will cost to avert a projected shortfall in May.
While the funding is designed to prevent cuts and maintain the current level of care for the more than 3 million beneficiaries of the subsidized health insurance program for low-income people, the bill adds mandates that immigrant rights advocates say could have “a chilling effect” and jeopardize the health of U.S.-born children in immigrant families — and others in those households who have legal status to be in the country.
The bill, which must get final votes in both chambers before it can be sent to the governor for a thumbs up or down, won bipartisan support in the state House of Representatives and Senate.
While Democratic members of both chambers overwhelmingly voted in support — with a single nay vote in each chamber, several members on the floor noted that because of time constraints they’d reserve their comments for the bill’s next vote on April 28.
Ahead of the bill’s introduction in both chambers, the House Democratic Caucus criticized the lack of collaboration or even advance notice from Republicans crafting the bill when it came to Medicaid and the budget.
“We’re not told who put the budget together, still don’t know who wrote what. We don’t know where anything came from in the budget, and we’re going from there,” House Democratic Leader Robert Reives (D-Goldston) said during a news conference before the vote.
“The House passed a clean rebase bill last year, so I’m glad to see that everybody else in the building is coming along,” Reives said. “This bill has things in it that I need to look at, comparing our bill to the requirements that the federal government has now, and seeing what’s been stuck in there that was just stuck in there.”
Feud between two branches
The need for the bill stems from a debate that began last summer over the annual Medicaid “rebase” — the budget adjustment made each year to account for enrollment changes, inflation in medical costs and any other changes to reflect the true program costs.
At the time, Republican leaders in the state House and Senate could not reach agreement on spending priorities for the biennium that started July 1, 2025. That led to a standoff that has shown no signs of abating, leaving North Carolina as the only state that has yet to pass a comprehensive budget for the two-year period.
Amid that backdrop, lawmakers approved a “minibudget” in late July that allocated $500 million toward the annual rebase for the fiscal year that ends June 30. Several weeks later, Democratic Gov. Josh Stein sent lawmakers a letter noting that what had been approved was $319 million short of what was needed to fully fund Medicaid for the year.
Republican lawmakers disputed that amount, citing legislative analysts who put the additional cost needed to get through the fiscal year closer to $119 million.
For many months, it looked like the two branches of government were playing fiscal chicken. The governor initiated Medicaid rate cuts in October, saying he had done so begrudgingly because lawmakers had not provided what was needed to make it through the fiscal year. In December, after several lawsuits against his administration resulted in a judge reversing cuts for autism therapy and personal care providers, Stein rolled all the cuts back.
Republican lawmakers accused Stein of playing politics, arguing that they wanted to dig deeper into his estimates and would come through with the needed funding before services had to be cut.
Ultimately, though, Stein’s early estimate was the one lawmakers went with in the bill this week.
Resolving Medicaid funding impasse
Lawmakers started signaling a few weeks ago that they’d reached an agreement over the amount needed to fund Medicaid and would prioritize the funding when they returned this week for the opening of their short session.
They also needed to make changes to the program to conform to new work requirements in the One Big Beautiful Bill Act, the federal budget approved last July. Those new federal requirements will affect the nearly 700,000 people who qualified for Medicaid when the state expanded the program to include more beneficiaries in 2023.
Traditional Medicaid recipients — low-income children, some parents of those children, low-income seniors and people with disabilities — won’t be subject to the work requirements.
One of the complicating factors of Medicaid funding was the possibility that changes in the funding formula could unwind the state’s long-fought expansion of Medicaid to about 700,000 new enrollees. But the bill makes changes to how hospitals — which have paid the state’s 10 percent portion of the costs for the expansion population — could continue contributing those funds even as the federal bill limited the way that states could tax Medicaid revenues.
‘Gateways’ to immigration checkpoints?
Immigrant rights advocates flagged parts of the bill on Wednesday, saying one section in particular would transform “local healthcare gateways into immigration checkpoints.”
The bill requires the state Department of Health and Human Services or county social service departments to “promptly refer any applicant or recipient for which citizenship or satisfactory immigration status could not be verified” to the U.S. Department of Homeland Security “or any other appropriate federal authority for investigation and enforcement.”
The referrals should be made, according to the bill, not only if someone’s immigration status cannot be determined, but also if someone has stayed beyond an authorized period for being in the country.
Immigrant advocates have said that the law doesn’t just target immigrants; they contend it potentially targets the stability of families that have immigrant members.
“This isn’t about eligibility; it’s about terrorizing parents who just want to take their kids to a doctor,” said Kelly Morales, co-director of Siembra NC, grassroots organization that works to support immigrant and working-class Latino communities across the state. “By forcing our county workers to act as federal informants, the state is making every child in our community less safe.”
Morales called on legislative Republicans to present a “clean” Medicaid funding bill without the immigration language.
Immigration restrictions debated
After the vote, House Rep. Tim Reeder (R-Ayden), an emergency medicine physician at the East Carolina University Brody School of Medicine, said he didn’t believe that the provisions in the bill would dissuade families with immigrant members from seeking care.
“I think that what you’re referring to is not in the bill,” he told NC Health News.
But a KFF survey of immigrants in the early days of the second Trump Administration found that the share of immigrant adults who said they avoided applying to a government program that helps with food, housing or health care in the past year because they “did not want to draw attention to their or a family member’s immigration status” went from 8 percent in 2023 to 12 percent in 2025, with the largest portion being those who are likely undocumented (from 27 percent to 46 percent).
Part of respondents’ reluctance to get care is their concerns about health care professionals sharing information with immigration enforcement officials — half (51 percent) of immigrant adults overall and about eight in ten (78 percent) of those who are likely undocumented say they are “somewhat” or “very” concerned about that.
In the past, North Carolina has extended Medicaid coverage to noncitizen children and pregnant women, but the One Big Beautiful Bill Act restricted many noncitizens from accessing health care, even if they are in the country legally. Some states have limited how much noncitizen Medicaid enrollee information they share with the Department of Homeland Security; they sued the federal government and got an injunction that allows them to withhold that information.
Rep. Maria Cervania (D-Cary), did speak on the floor Wednesday about her concerns that the North Carolina Medicaid rebase changes could have a negative impact on pregnant women and their families.
“When coverage is disruptive, the need doesn’t go away,” Cervania said. “That doesn’t mean you don’t have less health needs.”
People might wait to get care until they have to go to an emergency room. Federal law requires hospitals treat people seeking emergency care regardless of their ability to pay, and if a hospital cannot properly treat a patient they must arrange safe and appropriate transfer to a facility that can.
“They’ll have higher risk pregnancies because they don’t go to perinatal care,” Cervania said. “They’ll be showing up when children should be getting preventive care that they know would cost.”
“We know it costs less to do preventive care than have people show up in the emergency room,” Cervania added. “So ultimately, like I say, those costs don’t disappear just because we ignore them. They shift off into our hospitals, our counties, our communities and, honestly, it shifts to every single North Carolinian here in our state.”
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