NC moves to add Medicaid work requirements

North Carolina’s Medicaid expansion is facing a period of uncertainty as lawmakers prepare for the possibility that the federal government could reduce its financial commitment to the program. In response, state legislators are advancing a bill that would commit North Carolina to implementing work requirements for Medicaid recipients if federal policy allows it, a move lawmakers hope will help protect the state’s funding.

The proposal is being run through both chambers in a companion bill, which passed the House Committee on Health last week and was approved in the Senate Health Care Committee on Thursday.

“Work requirements for Medicaid have always been intended to be a part of our plan,” said bill sponsor state Sen. Ralph Hise, R-Mitchell. “Obviously, there’s been a change in Centers for Medicare and Medicaid Services (CMS), and we believe there’s plenty of indication that their opinion on work requirements are different than they have historically been. So this actually implements that and tells the department to apply for the work requirements to negotiate with CMS and to implement whatever is approved by the feds.”

The legislation comes as a policy signal to Washington and a contingency plan for what lawmakers fear may be coming: a change to the 90/10 federal-state funding split that currently supports Medicaid expansion.

Specifically, the legislation directs the state Department of Health and Human Services (NCDHHS) to implement a work requirement plan as a condition of participation in the Medicaid program as soon as such policy becomes federally permissible.

“With all the talk in Washington about changes to Medicaid, including changes in the percentages of payment changes in allowing work requirements, as I’ve talked to some of the congressional delegation, I felt like it was important to go ahead and step out and signal that in North Carolina, we supported a work requirement,” state Rep. Donny Lambeth, R-Forsyth, said last week.

Lambeth, a leading voice behind the bill, warned that “even a small tenth of a percent or 1%” reduction in the federal match rate could have “a major economic impact” on North Carolina. 

“This bill is fairly short. It just simply says that if the feds allow a work requirement as a part of the Medicaid expansion, North Carolina would be there as well to require work requirement,” explained Lambeth. 

Preparing for Federal Cuts

North Carolina’s expanded Medicaid program covers approximately 640,000 people across the state. If federal support is rolled back, state lawmakers would be forced to either cut coverage, raise state spending, or find new ways to tighten eligibility — such as work requirements. 

Lambeth said that if the federal government requires a change to the 90/10 rate, increasing North Carolina’s costs, they are unsure how they will respond. But his proposed bill will study the different options.

Though existing law already includes a trigger provision for work requirements, SB 403 aims to show a clear, proactive stance. 

Fierce Debate Over Impact

The proposal has met strong resistance from advocacy groups and some lawmakers during the House committee meeting. Some argued that work requirements risk cutting off essential health care for people who already face significant barriers to employment.

The North Carolina Justice Center noted that most Medicaid recipients already work or are unable to due to disability, school, or caregiving. A physician urged lawmakers to avoid policies that could unintentionally punish vulnerable families. 

Speakers noted that 60% of Medicaid enrollees already work, while the remaining 40% do not work because they are disabled, too ill to work, attend school, or are caretaking for family members. 

While the policy remains contingent on federal action, lawmakers backing SB 403 believe it’s a necessary step to defend North Carolina’s Medicaid system against potential funding rollbacks. The bill now heads to the Rules Committee in both the House and Senate, a key step to progressing to a floor vote.

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