Federal funding cuts putting health insurance out of reach for many North Carolinians

Enhanced tax credits that made Affordable Care Act health insurance coverage affordable for many lower- and middle-income households expired at the end of 2025 after Congress failed to extend them.

The impact was felt acutely in North Carolina: About 761,000 residents selected Affordable Care Act marketplace plans for 2026, some 214,000 fewer than had the previous year, according to figures published by the Centers for Medicare & Medicaid Services. The 22% decline was the largest percentage drop in the country. 

Now residents of the state are bracing for additional federal government policy changes that they fear will make it even harder to obtain health coverage. 

Funding cuts and eligibility changes that take effect on Jan. 1, 2027, will require that many Medicaid recipients work at least 80 hours a month or perform community service to keep their benefits. Renewal of eligibility will be required twice a year; it had been required annually before the changes.

A statement issued by CMS in December 2025 said the changes in the eligibility rules would “reduce improper enrollment,” and would actually be good for participants in the Medicare program.

“These reforms send a clear message: you have agency, your contributions matter, and we will support you on the path to purpose and prosperity,” said Mehmet Oz, the CMS administrator, in the statement. 

Health and Human Services Secretary Robert F. Kennedy, Jr. in the same statement said the changes would “restore the dignity of work and lift people out of poverty, while supporting the sustainability of Medicaid for the most vulnerable.”

Healthcare advocates say, however, that the changes will lead to people losing coverage who are eligible but who have a difficult time navigating the increasingly complex eligibility rules, or who are unable to meet the 80-hour-per-month work requirement.

“We should work on making it better, making more people eligible for Medicaid, more people eligible for the Affordable Care Act plans. Instead of trying to take money away, we should work on making things better, and just drastically having cuts does not do that,” said Vanessa Watson, state director of Protect Our Care North Carolina, a nonprofit group advocating for access to affordable, equitable healthcare.

The planned federal changes come against the backdrop of an increasingly dismal situation for residents seeking health insurance in North Carolina. For some families, the premiums they pay are no longer just another bill. The rapidly rising cost of medical coverage is forcing hard decisions about whether they can afford to remain covered at all. 

Watson told the North Carolina Independent that families are balancing healthcare expenses against other basic needs. 

“There’s an affordability problem across all things,” she said. “But when people have to choose between what groceries to get and what medicines to get, and be able to provide for their families, but also whether or not they’re able to see a doctor, we have a problem. And parents are sacrificing their own needs to ensure that their children can receive treatment.”

The precipitous rise in the cost of Affordable Care Act coverage is a big part of the reason fewer North Carolinians have health care coverage today 

The decline in ACA enrollment followed the expiration at the end of 2025 of the enhanced tax credits that had made ACA health coverage affordable for many lower- and middle-income households.

By February of this year, about 610,000 people had paid their premiums and activated their coverage, nearly 165,000 fewer than at the same point in 2025, according to a KFF analysis. 

In a North Carolina fact sheet, Protect Our Care estimated that premiums had increased an average of 149% for residents who had relied on the enhanced ACA tax credits. Actual increases vary based on a person’s age, income, locations and selected plan. 

For example, a 60-year-old couple in North Carolina making about $85,000 saw their average annual premium costs rise by $25,292 to $32,517, while a family of four making around $130,000 saw their costs rise by $13,428 to $24,478. 

All of this comes at a time when the cost of virtually everything is on the rise, creating hard choices for North Carolina families.

Watson said older adults and families raising children with disabilities are among the most vulnerable when coverage becomes unaffordable. She explained that the consequences of the healthcare affordability crisis extend beyond individuals’ wallets, affecting families, communities, the economy and access to care for everyone. Reduced access to care can also put additional pressure on hospitals as patients travel farther or rely on emergency rooms when care is unavailable closer to home, she said: “It’s going to affect whether people can see a doctor or not. So when other people are traveling to your hospital, to your emergency room, because they don’t have the care that they need in their area, the hours it takes, the longer wait times, the higher costs because of that, because hospitals are going to be stretched thin — that really does affect more than working families.” 

Amid the declining affordability of health insurance, North Carolina has already lost some of its rural hospital infrastructure. Since 2006, 12 rural hospitals in the state have closed or converted to limited-service models, according to data compiled by the Cecil G. Sheps Center for Health Services Research. Martin General Hospital in Williamston was the most recent full closure in 2023. 

Watson said the consequences won’t stop with coverage losses: She worries that people who cannot afford care will simply postpone it, potentially allowing preventable problems to become more serious and more costly. 

“So, as there are reductions to tax credits and to Medicaid, I think public health outcomes are going to worsen, and more families are going to be pushed into medical debt,” she said. “I don’t like that for North Carolinians, because when it comes to public health outcomes, people will forgo routine doctor visits, they’ll delay care, and that affects our workforce. … I’m concerned about the struggle to access necessary care that all comes from this.”