North Carolina Faces Rising Health Insurance Premiums and Medicaid Changes in 2026

The recent federal legislation, referred to as the "One Big Beautiful Bill," is poised to significantly impact health insurance access and costs in North Carolina starting in 2026. This new law affects millions of residents, including those covered by Medicaid and those purchasing insurance through the Affordable Care Act (ACA) marketplace. In North Carolina, approximately 9% of the population, about 1 million people, buy private insurance via the ACA marketplace, where premium increases are expected to be particularly steep next year due to the removal of pandemic-era tax subsidies. These subsidies previously capped monthly premiums to 8.5% of income, and their expiration is anticipated to cause premium hikes that may price out around 157,000 residents from coverage. Medicaid enrollment in North Carolina has expanded significantly since December 2023, with the state becoming the 40th to expand Medicaid under the ACA, allowing individuals up to 138% of the federal poverty line to qualify, adding an estimated 650,000 people. Medicaid covers a substantial portion of the state’s population, including 40% of children and many adults with chronic conditions. The new federal law imposes work requirements on Medicaid recipients who gained coverage through the expansion, mandating 80 hours of work, education, or volunteering monthly, with some exemptions. North Carolina officials estimate that up to 255,000 people may lose Medicaid coverage once these rules take effect in 2027, partly due to administrative challenges in compliance verification. The legislation also limits hospital taxes used to fund Medicaid expansion in the state, with the potential to disrupt funding and coverage unless state or federal laws are amended. To mitigate potential coverage losses, the bill includes a $50 billion Rural Health Transformation Program over ten years; North Carolina has applied for $200 million annually to support rural hospitals and preventive health programs. Medicaid constitutes roughly one-third of North Carolina's annual spending, and the state has already increased Medicaid funding by $500 million in response to rising enrollment and drug costs, yet remains $319 million short of program needs. Disagreements among state lawmakers have stalled further legislative action to close this funding gap, prompting cuts of up to 3% in Medicaid rates paid to providers and deeper reductions in inpatient, residential, and behavioral therapy services. Judicial interventions have prevented cuts to personal care and Applied Behavior Analysis therapy payments. Nonprofit clinics in North Carolina serve as a resource for uninsured individuals but do not provide inpatient or emergency care. Hospitals often negotiate reduced fees or payment plans for uninsured patients, and the state's Medical Debt Relief Program has eliminated $6.5 billion in medical debt for millions of residents in recent years. These developments collectively highlight significant financial and coverage challenges ahead for healthcare payers and providers in North Carolina, set within a complex regulatory and funding environment shaped by federal and state policies.