Regarding the new work requirements, Medicaid expansion adults will be required to complete and document 80 hours per month of work, volunteering, or educational activities to maintain eligibility. Furthermore, eligibility checks will need to be completed every 6 months instead of every 12 months. Medicaid expansion beneficiaries may not be able to meet these requirements for a variety of reasons, such as challenges in completing and submitting documentation, unstable work and housing conditions, as well as administrative hurdles and processing delays at the state level. These new requirements may cause 271,670 North Carolinians to lose Medicaid coverage. Additionally, the administrative burden on NC Medicaid to implement these systems may impact the agency's ability provide other needed services.

A study using national data found that the rate of overdose deaths in 2020 was twice as high among Medicaid beneficiaries (54.6 per 100,000) than for the total US population (27.9 per 100,000). Medicaid beneficiaries accounted for 25% of the US population but 48% of all drug overdose deaths. Some researchers project that Medicaid cuts from the OBBBA will cause 156,000 people to lose their medications for opioid use disorder, leading to over 1,000 excess overdose deaths each year.

Medicaid cuts will force states to find ways to make up for lost federal dollars and reduce state spending, which means eliminating programs and scaling back services. In a letter addressed to the General Assembly on August 11th, Secretary Sangvai announced that the NC Department of Health and Human Services would "begin to cut $319 million from Medicaid by implementing rate reductions of 3% across all providers, as well as rate reductions of 8% or 10% for select providers, and elimination of certain services altogether – all with an effective date of October 1, 2025." Among the institutional settings to see a 10% rate reduction are acute care hospitals and psychiatric residential treatment facilities, which provide specialized care to individuals with substance use disorders.

Cuts to Medicaid would also withdraw an important source of funding that rural hospitals rely on. Over the next 10 years in North Carolina, it is estimated that the OBBBA will reduce overall Medicaid expenditures by 11.2% and hospital Medicaid expenditures by 18.9%. Seven rural hospitals in North Carolina are already at immediate risk of closure and may not survive the loss of Medicaid financing. One health policy expert predicts that the rising costs of providing care to people without insurance will lead to the closure of some safety net clinics and hospitals. For rural and low-income areas, the loss of health care facilities and critical services will create even greater barriers to receiving care.

Looking ahead, North Carolina must overcome numerous challenges to achieve the targets established in Healthy North Carolina 2030. Drug overdose deaths may continue to decline, stagnate, or reverse trends over the next 5 years. The future is uncertain, but a few things are clear. States will need to take on more responsibility to ensure access to affordable health care while using less resources. Thousands of North Carolinians will lose health insurance; many of whom have received or are currently receiving treatment for substance use disorders. The increase in the number of uninsured people who receive medical care will place a greater financial burden on health care providers.

The biggest OBBBA changes to Medicaid are scheduled to take effect on January 1, 2027 (work requirements and 6-month eligibility redeterminations). Until then, we will continue to monitor any new developments that could help policymakers chart a path forward for North Carolina.