H.R.1 – 119th Congress (2025–2026), also known as the “Big Beautiful Bill,” was signed into law on July 4, 2025. While the full state-level impacts are not yet clear, what we do know is that the legislation includes historic health care cuts, with significant changes to federal funding for state Medicaid programs.
In addition to Medicaid, federal support for other critical resources, including the Supplemental Nutrition Assistance Program (SNAP) and the Children’s Health Insurance Program (CHIP), has also been reduced. These are lifelines for many North Carolinians.
The changes are scheduled to take effect in 2026, after the midterm elections. However, ripple effects are expected sooner as state health agencies, hospital systems, and providers start preparing for the looming budget constraints.
How Federal Cuts Could Impact North Carolina
All of us at the Foundation for Health Leadership & Innovation (FHLI) are deeply concerned about the wide-ranging implications of this legislation for community health across North Carolina, especially in rural and underserved areas.
For decades, Medicaid has played a vital role in expanding access to care, supporting families, and stabilizing rural health systems. Medicaid expansion in North Carolina marked a significant milestone in building a healthier future by providing more people with the opportunity to access care.
That progress is now at risk.
In this blog post, we’ll take a closer look at the role of Medicaid in rural communities, the promise of Medicaid expansion in North Carolina, and how recent federal policy changes may threaten access to care statewide.
The Role of Medicaid in Rural Communities
A disproportionate number of Medicaid enrollees live in rural areas, which make up approximately 20% of the U.S. population, or roughly 66 million people. In these regions, Medicaid:
- Covers 1 in 4 adults,
- Covers nearly half of all births, and
- Provides substantial funding for health care, which supports hospitals and expands access to services.
Many people postpone or avoid seeking medical care due to costs and the fear of overwhelming debt. Access to affordable health insurance enables people to receive care when they need it, utilize preventive services, and effectively manage chronic conditions. It also improves quality of life, increases one’s ability to work or attend school, and reduces health system costs.
A Closer Look at the Rural Health Landscape in North Carolina
This national picture of rural health and the role of Medicaid is especially relevant for North Carolina, with the second-largest rural population in the country. Today, more than 3 million children and adults rely on North Carolina Medicaid.
In December 2023, the state also expanded Medicaid, enabling over 670,000 previously uninsured adults to gain coverage. This represents an incredible stride and a commitment to investing in health that is now at risk due to the federal budget cuts.
Expected Impacts on Rural Hospitals
With nearly half of all rural hospitals nationwide operating at a loss, these cuts are likely to lead to additional closures and cause greater economic hardship for our communities facing the greatest barriers to accessing care. Since 2010, eight rural hospitals in North Carolina have closed.
These facilities are essential for ensuring people receive the quality care they need and deserve throughout their lives.
The consequences will go beyond hospital closures. Providers and families alike are expected to face higher health care costs, longer wait times, and increased travel to access care, impacting real people and providers every day.
Dr. Shannon Dowler on the Power of Medicaid
Dr. Shannon Dowler, a family physician and rural health advocate in Madison County, was interviewed on “The Daily” podcast in July 2025. During the interview, she shared real-life examples of the health landscape in rural Appalachia.
Dr. Dowler has dedicated her career to working as a safety-net provider and advocating for improved access to care at both the state and federal levels. She also previously served as North Carolina’s Medicaid Chief Medical Officer, giving her a deep understanding of the program’s intricacies.
In the podcast, Dr. Dowler discussed the devastating effects of inaccessible health care and highlighted the significant victory of Medicaid expansion in North Carolina. This legislation has had a life-changing and life-saving impact:
- Providing previously uninsured adults with access to preventive care,
- Reducing the stigma associated with being uninsured, and
- Enabling providers to make referrals and offer follow-up care.
In November 2023, Dr. Dowler spoke at a quarterly meeting of the North Carolina Rural Health Association (NCRHA) held in Asheville, where she also emphasized the importance of Medicaid coverage for North Carolinians and the positive effects of Medicaid expansion.
She is acutely aware of how policy affects people’s lives and their ability to access essential resources and services needed to care for themselves and their families.
We commend community health leaders like Dr. Dowler across our state for their dedication to providing high-quality care and advocating for the needs of our rural communities.
Continuing a Legacy of Community-Driven Care
While the full implications of these changes will take time to unfold, we will continue amplifying and supporting community-driven solutions that address social drivers of health and improve outcomes for all North Carolinians, regardless of who they are or where they live.
This commitment is rooted in the legacy of our founding director, Jim Bernstein, who dedicated his 35-year career to supporting community-driven care for rural and underserved populations.
He established the first State Office of Rural Health (SORH) in the country under the North Carolina Department of Health and Human Services (NCDHHS), championing equitable, community-based approaches to health.
These essential offices now serve as central hubs for rural health initiatives in every state, improving care access and quality, sharing data, providing technical support, and strengthening the health workforce.
As our health infrastructure faces growing threats, we are especially grateful to walk alongside our partners like NCDHHS, working to ensure everyone has the opportunity to live a healthy life and access care.
Joining Together for a Healthier Future
Moving forward, we know that the resilience and ingenuity of our communities will continue to drive innovative solutions to our most pressing challenges. Together, we will continue to carry on Bernstein’s legacy of improving outcomes for all North Carolinians—no matter who they are or where they live.
Resources
- One Rural Doctor on the Cuts to Medicaid
- Estimated Impact on Medicaid Enrollment and Hospital Expenditures in Rural Communities [PDF]
- One Big Beautiful Bill Act (OBBBA): Impact of the Rural Health Transformation Fund [PDF]
- State-by-State Analysis on the Impact of Federal Funding Changes to Medicaid [PDF]
- 2025 NC Rural Health Snapshot
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