North Carolina lawmakers on Wednesday advanced House Bill 696, a measure that would use some state reserve funds to keep Medicaid funded through the end of this fiscal year. But the proposal also adds work requirements, eligibility checks, and additional paperwork for recipients to enroll or stay in Medicaid.
The federally subsidized health insurance program serves low-income individuals, children and some people with disabilities. It covers more than 3.1 million people across North Carolina, or more than a quarter of the state’s residents.
To qualify for Medicaid, an individual or family must meet several eligibility requirements based on a family’s size and income. For a family of four, household income must be $3,698 per month or less. For an individual, income can’t exceed $1,800 per month.
People who use Medicaid must also find a provider who accepts the program’s coverage.
The bill would move $319 million from a state reserve fund to cover higher-than-expected Medicaid costs this year. That number matches the estimated shortfall leaders with the state Department of Health and Human Services repeatedly warned lawmakers about since last year.
Other Medicaid program changes proposed in HB 696 come from new rules in the federal legislation known as the “One Big Beautiful Bill,” which NC Local reported about in January. Still, some parts of the state bill go beyond what the federal law requires.
What does North Carolina Medicaid House Bill 696 do?
If passed, the new law would cover ongoing costs separate from Medicaid expansion.
North Carolina expanded Medicaid in 2023 under the Affordable Care Act. As of March 2026, more than 720,000 people have gained health insurance coverage as part of that expansion. But the One Big Beautiful Bill cuts $1 trillion from Medicaid nationwide over the next 10 years.
It’s not yet clear how that will affect expansion recipients, but the spending cuts made by Republicans in Washington and backed by the Trump administration could increase how much states need to fund health care.
House Bill 696 would require the state health department to check recipients’ Medicaid eligibility every month instead of every quarter. That means more frequent reviews of beneficiaries’ income, work status, address changes and other personal information. This work is cited as one of the reasons Medicaid costs would increase.
Medicaid recipients also might not qualify solely based on information they report themselves. In most cases, the state would need more proof of eligibility requirements, such as income, how many people live in the beneficiary’s household, or work status.
The bill also calls for an audit of the Medicaid program to detect potential fraud, waste and abuse. And HB696 would create stricter rules for Medicaid coverage of ABA therapy for children with autism, a treatment that has grown rapidly since Medicaid was expanded.
What’s next?
The state House and Senate approved the latest version of the bill Wednesday. It has to go through another round of debate and voting in each chamber next week.
If it passes those votes, it goes to Gov. Josh Stein for his signature. Stein has not publicly said whether he will sign the bill, but his administration has pushed for filling the Medicaid shortfall since last year.
If the measure doesn’t pass, Medicaid users could see a delay, disruption or even denial of benefits, according to the state Department of Health and Human Services. “This would put health care at risk for more than 3 million North Carolinians who depend on Medicaid,” their website said.
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