PLEASE NOTE: This is a minimally-edited transcript that originates from a program that uses AI.
Thom Tillis: Mr. President, I come today to explain my vote yesterday for voting against the motion to proceed on this bill.
Anisa Khalifa: Earlier this summer, North Carolina, Senator Tom Tillis made waves when he gave an impassioned speech on the Senate floor. It was a rebuke of the massive tax and spending package making its way through Congress.
The quote, one big beautiful bill.
Thom Tillis: So what do I tell? 663, uh, thousand people in two years or three years when President Trump breaks his promise by pushing them off of Medicaid because the funding's not there.
Anisa Khalifa: The bill included new rules for Medicaid and how it's funded, and for Tillis, that was a deal breaker.
The senator was one of the few Republicans who voted against the bill. And he unexpectedly announced his retirement from public service shortly afterward
Thom Tillis: in Iowa, to the people of North Carolina to withhold my affirmative vote until it's Democrat.
Anisa Khalifa: But that didn't stop the bill from becoming law. Now, dozens of states, including North Carolina must figure out how to keep a vital slice of their healthcare systems intact before it's too late.
And until this is home state, one group of healthcare providers might just be the canary in the coal mine.
Donny Lambeth: Rural healthcare in North Carolina is in somewhat some serious trouble. If
Laura Ucik: they lose Medicaid, life is over.
Anisa Khalifa: I'm Anisa Khalifa. This is the broad side where we tell stories from our home at the crossroads of the South.
This week, the Fight to Salvage Medicaid expansion, and what this all means for the future of rural healthcare.
Nick de la Canal: I'm Nick Decanal and I'm a reporter and host for WFAE.
Anisa Khalifa: Nick's been at Charlotte's Public Radio station for more than a decade. And during that entire time, he says Medicaid has been at the heart of North Carolina politics, more specifically Medicaid expansion,
Nick de la Canal: especially under Governor Roy Cooper who is really pushing for the state to expand Medicaid.
But Republican lawmakers in the State House and Senate were really reluctant.
Anisa Khalifa: The crux of the debate went something like this about a decade ago. The Affordable Care Act gave individual states the option to expand eligibility for Medicaid. If a state signed up for expansion, then in theory, more people would receive health insurance and more money would then flow into hospitals.
With all these newly insured patients,
Thom Tillis: it gets more people covered. It makes people healthier. It uses tax dollars.
Anisa Khalifa: In North Carolina, Democrats like former Governor Roy Cooper, consistently beat the drum in its favor.
Unidentified Anchor: Let's make a deal. Let's get this done.
Anisa Khalifa: And to sweeten the deal. If states opted in, the federal government agreed to pay for most of the costs that came with expansion, but despite these incentives, it wasn't an easy sell.
Fiscal conservatives in North Carolina remain skeptical because.
Nick de la Canal: They had this fear that yes, the federal government is offering a great deal right now saying that they're going to cover 90% of the cost for Medicaid expansion. But what if that changes in the future and then you know, the state's on the hook for the rest of these costs.
So there was a lot of debate, a lot of resistance
Unidentified Anchor: lawmakers in Raleigh today. Uh, but they say that they still don't have any deal on this and may not for months actually capital reporter,
Anisa Khalifa: but finally. After years of back and forth, North Carolina signed up for Medicaid expansion in 2023. Today, 40 states and DC have chosen to expand Medicaid, but what makes North Carolina stand out is how they made it happen.
Unidentified Anchor: Rare bipartisan agreement as Republicans join Democrats in North Carolina to expand Medicaid. After a decade of debate, expansion to Medicaid could be coming to North Carolina State House and Senate leaders announcing an agreement today it will allow.
Nick de la Canal: So Republicans came on board and it was a big bipartisan moment.
When Democrats and Republicans in the state legislature came together, they voted to expand Medicaid,
Anisa Khalifa: but there was a key component that secured many state Republicans support North Carolina's Medicaid expansion was paired with a trigger law. It stipulates that zero funds from the general state budget can go into expansion
Nick de la Canal: because if they do Medicaid expansion ends automatically.
Anisa Khalifa: The entire program goes away,
even though it's only been a couple years, the results have been pretty impressive since expanding coverage, more than 680,000 North Carolinians have signed up for Medicaid, and a lot of those new enrollees are in rural areas.
Nick de la Canal: About 35%. So more than a third are from rural counties in North Carolina.
Anisa Khalifa: That's a big deal for the state, considering North Carolina has the second highest rural population in the country. And this influx has paid off for hospitals too.
Nick de la Canal: So before Medicaid expansion, a lot of rural hospitals were sort of in real financial straits, and between 2005 and 2023, so when the state expanded Medicaid, there were 12 rural hospitals that closed or got rid of inpatient care.
Since Medicaid was expanded, that number's been zero.
Anisa Khalifa: But now some of the rules around Medicaid are set to change. Thanks to the tax and spending bill signed into federal law earlier this year. Nick recently reported on these changes and what it all means for Medicaid in North Carolina.
So why is Medicaid at risk in North Carolina? Can you break it down for us?
Nick de la Canal: Yes, I absolutely can, and I will try to do it in the simplest way possible because I know that health policy is just like a huge tangled mess of confusing policy stuff.
Anisa Khalifa: Yeah. Thank you.
Nick de la Canal: So really there's kind of like two big things happening right now.
Two big reasons why Medicaid expansion is sort of at risk in North Carolina. The first one are these new work requirements that were included in the Republican tax and spending law, also known as the one big, beautiful bill. So starting January 1st, 2027, the law requires North Carolina to add these new work reporting rules for expansion adults.
Anisa Khalifa: This new work requirement means some people who previously qualified for Medicaid will be kicked off their health insurance. Estimates from state health officials, put it around 255,000 North Carolinians. Meanwhile, Nick says, implementing the work requirement is also going to demand a lot more from the state.
Nick de la Canal: That means the state is gonna need to build new computer systems, hire staff. They need to monitor eligibility a lot more often, and so all of that costs money. It could be like tens of millions of dollars a year.
Anisa Khalifa: Basically, it's a big administrative overhaul. And health experts warn that if there's a delay or problems during its rollout, then people could be at risk of losing coverage even if they're qualified.
So that's the first big change. The second change is with a tax on hospitals, something most states use to help pay for Medicaid expansion.
Nick de la Canal: Right now, North Carolina hospitals pay about 6% of their revenue into estate tax. And that basically covers all of the state's share of Medicaid expansion. And for every $1 that the hospitals put in, the federal government matches that with $9.
So the tax and spending law is gonna cut that hospital tax almost by half.
Anisa Khalifa: That cut won't come all at once. The new law lowers the provider tax bit by bit over several years. Nevertheless,
Nick de la Canal: that means that there is gonna be a lot less money overall, even coming from the federal government. And so state officials have said this could cost the state something like $50 billion.
Wow. And so the question there is how do you keep the program running when there's so much less money coming in?
Anisa Khalifa: It's an important question, especially for rural hospitals and clinics operating on a thin margin already. These changes, Nick says they're likely to face a tough future.
Nick de la Canal: They probably will face some real significant financial strain, and I think that what you can say for sure is that you probably are not gonna see any new rural hospitals opening up.
And you gotta remember too, that when a rural hospital closes, it doesn't just affect, you know, the people who have Medicaid, but that affects an entire community and also an employment base. People who work there.
Anisa Khalifa: For your reporting, you talked with some rural providers. Can you tell me about your trip to Henderson, North Carolina and who you talked to?
Nick de la Canal: Yes, so there was one family physician I spoke to who worked in Henderson, North Carolina, which is, um, just kind of south of the Virginia border.
Laura Ucik: My name's Laura Ucik. I'm a family medicine doctor. I work at Rural Health Group, which is a federally qualified health center in Henderson. And
Nick de la Canal: you know, I asked her who was she most worried about,
Laura Ucik: the type one diabetics patients who have type one diabetes who are so young and if they lose Medicaid, life is over.
Like it's just, it's hard. It's just over. Like they're not gonna make it to 30, there's no way.
Nick de la Canal: She said that she had had patients before Medicaid expansion who had lost their lives. I mean, people in their twenties or thirties with type one diabetes. Who died just because they weren't able to access care.
So she said that that was a, a real risk.
Anisa Khalifa: Hmm. What about possible lifelines for rural hospitals? There's a federal rural health fund that's supposed to help with some of the losses these hospitals are anticipating.
Nick de la Canal: Yes, yes. So in the Republican tax and spending law, there is $50 billion that has been set aside for rural hospitals because Republicans kind of anticipated that this might have some negative effects.
However, a lot of health advocates have said that that is not nearly enough. Remember, the state of North Carolina is anticipating that we might lose $50 billion just over the next decade, and we're just one state. So will $50 billion for the whole country really fill that gap.
Anisa Khalifa: Yeah, seems like a bandaid rather than an actual solution.
Nick de la Canal: That's what some health advocates have argued. Certainly
Anisa Khalifa: now with the new rules on the way the ball is in the court of state lawmakers who have to figure out how to continue funding Medicaid expansion. And remember, because of the trigger clause, they can't pay for it with general state funds.
Nick de la Canal: The big deadline is January 1st, 2027, which is when the new work requirements are supposed to take place.
Now, if the state can't come up with a way to pay for those new work requirements by that date, that could be the end of Medicaid expansion in North Carolina. And I mean, you'll see effects pretty immediately.
Anisa Khalifa: So no pressure, right? More on that after a short break.
If you walked into Wake Forest Baptist Medical Center back in the late two thousands, you might have actually crossed paths with Donnie Lambeth.
Donny Lambeth: There were some nights I would just go sit in the emergency room and talk to people and they didn't always know who I was.
Anisa Khalifa: He wasn't a doctor or a patient? No, he was president of the hospital.
One of the biggest in Winston-Salem, North Carolina. So what was Lambeth doing in the waiting room?
Donny Lambeth: I was trying to understand, so why do people come to the emergency room? Why is our emergency rooms so full of people that really didn't need emergent care?
Anisa Khalifa: The main reason he says because they couldn't afford health insurance and at the emergency room
Donny Lambeth: you can't turn 'em away.
You can't even ask them for money to pay their bill up front. You pretty much treat them, and even if you don't have insurance, you can go to some of the best doctors in America right here in our emergency rooms.
Anisa Khalifa: Lambot says this wasn't just a problem in Winston-Salem. He saw the same scenario play out nearly everywhere, and it often led to expensive unpaid medical bills.
Donny Lambeth: I, I have seen a lot in healthcare and that was one of the reasons I was recruited to come to General Sim is to work on. Financing of healthcare
Anisa Khalifa: after a long career as a hospital administrator, Lambeth jumped from healthcare over to politics since 2013. He's been a state representative for East Forsyth County today as a co-chair for the House Health Committee.
He's an influential voice in state health policy and from the get go Medicaid expansion was a top priority. For the Republican.
Donny Lambeth: I, I know the Medicaid expansion was not a popular topic for me as a Republican, but I saw it firsthand and I saw how it could help so many people in North Carolina. And of course, you know, that was a long journey.
Um, I think a lot of criticism,
Anisa Khalifa: but Lambeth barreled through and finally helped get expansion over the finish line in 2023. And the Herculean effort it took to make it happen isn't lost on him.
Donny Lambeth: Not only did we do the expansion, but we did it with a Democrat governor and a Republican General Assembly, which made it a very unique situation.
Anisa Khalifa: But now his crowning achievement has another hurdle in front of it.
Donny Lambeth: The work requirement is now a reality and we'll have to take some of those individuals. The Medicaid expansion roles. So some folks will lose coverage by the nature of they're qualified but they're not working.
Anisa Khalifa: Lambeth says the last thing he wants to see is uninsured people returning to ERs.
Donny Lambeth: They're just gonna return back to the state's emergency rooms, and that's the worst place for primary care. You go in there with a headache, guess what? They're gonna put you through the MRI scanner to make sure you don't have a tumor. I mean, that's just the nature of defensive medicine. But I guarantee you, you go into a emergency room anywhere in the state.
And you tell 'em you've had severe headaches, they're gonna put you right in one of those $10,000 scans.
Anisa Khalifa: And in that scenario, nobody wins. According to Lambeth, we're back to square one where lots of uninsured patients won't be able to afford an expensive ER bill. And hospitals will have to take on the cost.
A 2015 study from the National Bureau of Economic Research estimated that every uninsured person costs local hospitals around $900 in uncompensated care each year. So Lambeth is scrambling to find ways to cover the estimated 255,000 newly uninsured North Carolinians. But he's wary of the trigger law, the compromise that got many of his fellow Republicans on board with Medicaid expansion in the first place.
Again, if the state funds even part of Medicaid expansion from the general state budget, the entire program will end. So as a way to keep these people insured, Lambeth is looking into alternatives to Medicaid.
Donny Lambeth: I've talked to some insurance companies about writing a policy that might. Be offered to those individuals.
That would be a quote, a low cost policy, and it might cover some limited services. IE wellness care, going to the primary care doctor. So that's something we're trying to figure out. Is there a way to take care of those 150, 200,000 people that would drop off?
Anisa Khalifa: It's a delicate balancing act. Figuring out how to implement the work requirement and keeping as many people insured as possible, all without dipping into general state funds and tripping the trigger clause, something Lambeth says is pretty much set in stone.
Donny Lambeth: I don't think there's much of an appetite to step in. Fund additional Medicaid covered lives. I cannot under any scenario, imagine the state would step in. I would not recommend the state step in and fill that gap or hole.
Nick de la Canal: It's a really difficult situation because all these people have gotten health coverage because of it.
Anisa Khalifa: This is reporter Nick Dilla Canal again, for people trying to assess the fallout. He says, all eyes are on rural healthcare.
Nick de la Canal: A lot of these people in rural counties and politically, it might not be a great move to take away health coverage from people that can make a lot of people angry, so it puts 'em in a really difficult spot.
I do worry that a lot of
Donny Lambeth: these people in rural areas, I mean the rural areas are getting hit hard. Rural healthcare in North Carolina is in somewhat some serious trouble.
Nick de la Canal: We know that Governor Josh Stein has said that there are five, five rural hospitals in particular that could be at risk of closing.
He was drawing from a study that was done that kind of looked at hospitals around the nation and what their financial status is. You know, how much money they're bringing in from Medicaid expansion. I did reach out to one of those hospitals, blue Ridge Regional, in Spruce Pine, and I was trying to reach out to say, Hey, you know, the governor is saying that you guys could be at risk of closing, like, what's going on?
Like, can you guys provide any clarity? And in their statement they said, well, you know, we don't know anything about that yet. We're, we certainly do not intend to close. But they did cite financial uncertainty as like a real challenge moving ahead.
Anisa Khalifa: As far as the $50 billion Federal Rural Health Fund goes, Donnie Lambeth agrees with critics that
Donny Lambeth: it's a drop in the bucket of what's really needed,
Anisa Khalifa: and it's simply not enough to keep rural healthcare rolling like it has been since Medicaid expansion came to town.
Donny Lambeth: Now what? What's the consequences of that? Probably rson. More limited services in rural areas, maybe even some that convert from inpatient just to an outpatient site.
Anisa Khalifa: Lambeth also sites telehealth as a way to offer low cost care to rural communities. But ultimately he says, acquisition by bigger hospitals and networks may be the only way for rural hospitals to survive.
Donny Lambeth: It's a free market, and there'll be, I think, continued takeovers by the big hospitals. And when you get down to it, the little hospitals that are trying to survive probably don't have much choice. I think in 10 years you really won't see any independent rural hospitals. They'll all be owned or operated by a bigger system.
Anisa Khalifa: North Carolina lawmakers are currently hashing out the state budget, whether it'll include a plan to deal with Medicaid's, new rules remains to be seen, and they also need to figure out how to fund current Medicaid services. So Lambeth has a lot on his plate right now.
Donny Lambeth: The governor's calling me, he probably wanna talk about Medicaid,
Anisa Khalifa: but as lawmakers focus on the checkbook, medical providers are looking at the forecast, bracing for what's ahead.
Tim Evans: We're very much in a wait and see, you know what, what is gonna actually happen? No idea.
Nick de la Canal: Tim Evans is the CEO. Of a physician's network in Western North Carolina. The Mountain Community Health Partnership and Western North Carolina, as he brought up, is still struggling from Hurricane Helene. He told me that, you know, this uncertainty almost feels like another storm on the horizon.
Tim Evans: We have done a good job of putting cash away and, and we really made that a focus so that we could weather a storm. We didn't know that the storm would be coming from Washington as much as, as from Helene.
Nick de la Canal: And I really like that metaphor because it does seem right now like the clouds are gathering over North Carolina.
Hospitals and doctors and clinics. I think one difference from Helene is that at least this is a storm that we can see coming. We have sort of a runway to try to prepare or to try to come up with something that could stave the storm off, but it does feel like it's a little inevitable right now. And so I think it really is up to our lawmakers and the health system to try to prepare for this and come up with something before the storm hits.
Anisa Khalifa: If you'd like to check out more of Nick Dilla canal's reporting, we've dropped a link in our show notes. This episode of The Broadside was produced by Charlie Shelton-Ormond and edited by Jerad Walker. Our executive producer is Wilson Sayre. The Broadside is a production of WUNC North Carolina Public Radio and is part of the NPR network.
If you have feedback or a story idea, you can email us at broadside@wunc.org. If you enjoyed the show, leave us a rating, a review, or share it with a friend. I'm Anisa Khalifa. Thanks for listening, y'all. We'll be back next week.