Cumberland County residents are rallying against federal funding cuts, including those proposed to Medicaid.
The U.S. House Republicans’ budget plan directs the House Energy and Commerce Committee, which oversees Medicaid and Medicare, to cut $880 billion in federal spending over the next 10 years. While the budget doesn’t mention Medicaid, experts say the cuts are impossible without limiting the program’s federal funding.
“The math is conclusive: Major cuts to Medicaid are the only way to meet the House’s budget resolution requirements,” Alice Burns, associate director of KFF’s program on Medicaid and the uninsured, wrote for the independent health policy organization. “There are a myriad of options available for cutting Medicaid, but all of them would leave the states facing difficult choices to raise revenues or cut spending.”
Medicaid, the health care program for low-income adults, children and people with disabilities, isn’t the only social services program at risk under the proposed budget. The House is asking its Agriculture Committee to reduce spending by $230 billion in the next decade. The cuts are likely to be felt in the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps.
“Republican lawmakers could make these benefit or eligibility cuts directly through changes to federal SNAP policy,” wrote Katie Bergh, senior policy analyst for the nonpartisan research and policy institute the Center on Budget and Policy Priorities. “But they could also enact them indirectly by shifting costs to states, forcing state officials to decide whose benefits will be cut and by how much.”
Medicaid
Cumberland County residents account for 4.5% of the state’s more than 3 million Medicaid recipients.
As of March, about 47% of Cumberland County residents under 65 are covered by a Medicaid plan, according to the N.C. Department of Health and Human Services. Almost 20% of those residents, a total of 27,182, are covered under NC Medicaid expansion, which began in December 2023 and opened up Medicaid eligibility to those 19 to 64 with higher incomes.
If federal Medicaid cuts were to become reality, residents covered by the state’s expansion would likely lose coverage. The state legislation passing Medicaid expansion included what Vivian Toukes, Cumberland County Department of Social Services economic services assistant director, called the “kill clause.” The clause states that North Carolina will stop covering the expanded population “as expeditiously as possible” if the federal match rate for the population’s care costs falls below 90%.
Brenda Jackson, county social services department director, told CityView that federal cuts to Medicaid would impact her department and the community when the Department of Government Efficiency, a non-governmental entity known as DOGE, first floated the cuts in December. Besides giving more residents health insurance, Medicaid expansion created 57 positions at the county department, which administers Medicaid.
“A loss of this magnitude would result in worsening health outcomes for our citizens and could financially devastate individuals and families with medical debt,” Jackson said. “It could result in a strain on our emergency departments, the CARE Clinic and other nonprofits providing services to the uninsured.”
The Cape Fear Valley Medical Center, under Cape Fear Valley Health, already has one of the busiest emergency rooms in the nation.
A loss of Medicaid expansion would strain Cape Fear Valley Health, the county’s primary health system and the eighth largest in the state, beyond its emergency departments. Without Medicaid expansion, North Carolina would see a 6.6% decrease in health care spending on non-elderly patients, an analysis from the Urban Institute and the Robert Wood Johnson Foundation found. It would be one of the largest decreases in the country.
The spending loss would increase the amount of uncompensated care — hospital services provided at reduced costs, for free or for which the health system doesn’t receive payment — provided by hospitals. This includes Cape Fear Valley Health’s eight hospitals.
“Medicaid expansion has significantly improved access to care across our region. If that coverage were rolled back, it would have a substantial impact on our patients — particularly their ability to receive timely outpatient care,” Chaka Jordan, Cape Fear Valley Health’s vice president of marketing and communications, told CityView. “We would also expect an increase in preventable hospital stays, a rise in uncompensated care and added strain on hospital emergency departments and inpatient units.”
Cumberland County has 1.23 times more preventable hospital stays than the state, according to the 2024 Community Health Needs Assessment.
Medicaid funding is also crucial to the health system’s participation in the state’s medical debt relief program, instituted last summer. In exchange for higher Medicaid reimbursement payments, Cape Fear Valley Health and 98 other acute care hospitals across the state agreed to forgive debts of eligible patients for care dating back to 2014.
While it’s uncertain what and whether Medicaid cuts will make it to the final federal budget, the N.C. Department of Health and Human Services said the potential cuts risk the medical debt relief program and a handful of others funded by federal Medicaid dollars.
“While the department is monitoring potential federal provisions, formal proposals are needed to determine the specific impact to the state’s Medicaid program,” a department spokesperson told CityView. “However, some of the current proposals under discussion would threaten the sustainability of key Medicaid programs and initiatives, including the medical debt relief incentive program. These efforts could result in cuts to benefits, programs or provider reimbursement in a way that would be detrimental to the people that receive these lifesaving services.”
Earlier this month, Gov. Josh Stein wrote a letter to congressional leaders and the state’s congressional delegation urging them to take Medicaid cuts off the federal budget negotiating table.
“Medicaid is a lifeline for more than 3 million North Carolinians, including many of our most vulnerable people — children, seniors, individuals with disabilities and those living in rural communities,” Stein wrote. “Any reductions in Medicaid funding would jeopardize access to critical health care for these groups, putting at risk their well-being and the stability of our health care system.”
SNAP
SNAP, also called Food and Nutrition Services (FNS) in North Carolina, gives low-income people and families additional funds to purchase food. The federal government pays for SNAP, though states fund 50% of its administrative costs.
To meet the proposed House Republicans’ budget, experts like Bergh believe the Agriculture Committee would need to drastically reduce spending for the SNAP program, which cost $112.8 billion in fiscal year 2023. To do this, Bergh wrote, it’s likely the federal government would require states to supplement the loss of federal funding if they don’t want their residents to lose benefits.
Bergh is, in part, basing this assumption on a previously proposed budget from President Donald Trump’s first term. If it had passed in full, Trump’s 2018 budget would have required states to pay for 10% of SNAP benefits in 2020. The rate would have increased to 25% by 2023.
At a 10% match rate, North Carolina would need to find $292 million to maintain current eligibility and levels of SNAP benefits. It’s a budget line the state can’t afford, according to Alexandra Sirota, executive director of the NC Budget & Tax Center. She pointed to the Office of State Budget and Management’s prediction of decreasing state revenues in the coming fiscal years, which Stein called “a fiscal cliff.”
“There’s no way the state can take on any cost shift from the federal government at this point, even if those cost shifts are not as extreme as we’re hearing about,” Sirota told CityView. “Any cost shift is not sustainable if we want to continue to deliver the services that are already being delivered to school children, to seniors and community, to businesses seeking assistance. None of that will be possible.”
North Carolina has the 18th highest percentage of residents receiving SNAP in the country, according to an analysis of U.S. Department of Agriculture and U.S. Census data by TraceOne, which specializes in regulatory compliance for the food and beverage industry. As of February, 35,959 Cumberland County households receive SNAP, helping them purchase things like cereal, fruit and vegetables every month.
Besides loss of benefits, an analysis from the Commonwealth Fund found that SNAP and Medicaid cuts would risk the jobs of 35,500 North Carolinians. In Cumberland County, SNAP is managed by seven teams at the county social services department. The teams are comprised of 10 to 12 income maintenance caseworkers who process applications and recertifications for the program.
The Commonwealth Fund estimates that the SNAP cuts would create a drop of $558 million from the state’s gross domestic product. An analysis by NCDHHS found over $1.87 billion of SNAP benefits were spent in North Carolina from Jan. 1, 2023, to June 30, 2023.
“FNS has a significant impact on the local economy. It boosts local spending, and every SNAP dollar spent generates additional economic activity,” Jackson, Cumberland County social services department director, said. “The increased consumer spending as a result of FNS benefits helps sustain jobs and serves as an economic stabilizer during a recession.”
Sirota said North Carolina could find some funds to ensure residents don’t lose Medicaid or SNAP benefits through the state’s corporate income tax. The General Assembly’s 2021 Appropriations Act instituted a gradual phase-out of the tax, decreasing it to 0% after 2029. The decrease would mean a loss of $2.2 billion in state revenues by the time they’re phased out, according to the NC Budget & Tax Center.
“There’s simply no way that those scheduled cuts for the wealthy and profitable corporations should move forward in the face of the financial uncertainty that the federal government and that our state is currently facing,” Sirota said.
Local N.C. House District 42 Representative Charles Smith also pointed to the corporate income tax during his reelection campaign and to CityView last winter as a funding source for not only Medicaid but also child care and Hurricane Helene recovery.
To support investments in health and other sectors, Stein proposed a freeze in the corporate income tax, which sits at 2.25%, in his proposed 2025-2027 budget.
While concerned about Medicaid, SNAP and other federal cuts, Jackson told the Social Services Board the department has a few months to breathe until Congress begins budget discussions in earnest.
“I haven’t hit the panic button yet,” Jackson said at this month’s board meeting. “But we’re certainly nervous, but not panicked. So we’re just cautiously watching things and just trying to stay in the loop on where we can educate folks about how things may impact us and the work that we do, but most importantly the citizens that we serve.”
CityView Reporter Morgan Casey is a corps member with Report for America, a national service program that places journalists into local newsrooms. Morgan’s reporting focuses on health care issues in and around Cumberland County and can be supported through the CityView News Fund.
