Series 14: State Implementation of Work Requirements
Word Count Target: 2,500-3,000 words
State Profile#
Demographics
- Expansion adult population: approximately 650,000-680,000 (as of late 2025)
- North Carolina was the 40th state to expand Medicaid (December 1, 2023)
- Age distribution: 19-29 (approximately 35-40%), 30-49 (approximately 35%), 50-64 (approximately 25%)
- Gender composition: approximately 56% female, 44% male
- Racial and ethnic composition: approximately 57% white, 37% Black, 10% Hispanic/Latino
- Black enrollment concentrated in eastern North Carolina and urban centers (Charlotte, Raleigh-Durham)
- Approximately 73% of expansion enrollees were already working when they enrolled
- Total Medicaid enrollment exceeds 3 million (approximately 1 in 4 North Carolinians)
Geographic Characteristics
- 100 counties with substantial variation in population density, economic conditions, and healthcare access
- Charlotte metropolitan area (Mecklenburg County and surrounding): largest urban concentration, banking and financial services hub
- Raleigh-Durham-Chapel Hill Research Triangle: technology, pharmaceuticals, and higher education
- Eastern North Carolina: rural, economically distressed, resembles Deep South demographics
- Western mountain region: geographic isolation, tourism-based seasonal employment, Cherokee reservation
- 78 of 100 counties classified as rural by NC Rural Center
- Rural residents represent approximately 20% of state population but 36% of Medicaid expansion enrollees
- Twelve rural hospitals have closed or stopped inpatient services since 2005; at least ten more at risk
- Counties with highest expansion enrollment rates: Anson, Edgecombe, Richmond, Robeson, Swain (approaching 20% of adult population)
Special Population Concentrations
- Lumbee Tribe: 55,000+ enrolled members, largest tribe east of Mississippi River, concentrated in Robeson, Hoke, Cumberland, and Scotland counties; state-recognized but lacks full federal benefits despite 1956 Lumbee Act; Trump executive order (January 2025) initiated path to full recognition
- Seven additional state-recognized tribes: Haliwa-Saponi (3,800 members), Coharie (2,700), Meherrin, Sappony, Occaneechi Band, Waccamaw Siouan; none have full federal recognition or IHS exemption pathways
- Eastern Band of Cherokee Indians: federally recognized tribe in western mountain counties (Swain, Jackson, Haywood, Cherokee, Graham); operates Cherokee Indian Hospital Authority and Tribal Option managed care
- Agricultural workforce: significant Hispanic/Latino population in eastern NC engaged in tobacco, sweet potato, hog, and poultry operations; seasonal and often informal employment
- Military population: Fort Liberty (formerly Fort Bragg), Camp Lejeune, and other installations; transient military spouse population with employment verification challenges
- Refugee populations: growing resettlement programs in Charlotte and Raleigh metros
- Substance use disorder prevalence: significant opioid crisis in both rural eastern counties and urban areas; officials express concern about coverage losses disrupting medication-assisted treatment
Economic Context
- State unemployment rate: approximately 4.0% (substantial county-level variation; rural eastern counties 1.5-2x state average)
- Major industries: banking/financial services (Charlotte), technology/pharmaceuticals (Research Triangle), healthcare systems, agriculture, military installations, hospitality/tourism
- Significant gig economy presence in metropolitan areas (Uber, DoorDash, Amazon Flex)
- State minimum wage: $7.25 (federal floor)
- Many expansion enrollees work in childcare, retail, food service, home health, and other industries offering limited hours, unpredictable schedules, and no employer-sponsored insurance
- Poverty rates exceeding 25% in rural eastern counties (Scotland County highest at 28%+)
Work Requirement History#
North Carolina has no prior work requirement implementation experience. The state did not expand Medicaid until December 2023, meaning it has neither the negative lessons of failed implementation (like Arkansas) nor the infrastructure built during previous attempts (like Ohio or Michigan).
However, the 2023 expansion legislation (House Bill 76) included provisions anticipating work requirements. The original law contained trigger language requiring NCDHHS to negotiate with CMS for work requirements if federal policy indicated approval was possible. This language reflected the compromise necessary to secure Republican support for expansion in a state where work requirements had long been a conservative priority.
The legislation also mandated development of a voluntary workforce development program for expansion enrollees. The Departments of Commerce and Health and Human Services, in collaboration with the UNC School of Government’s ncIMPACT Initiative, developed a comprehensive workforce plan delivered to the General Assembly in December 2024. This plan was explicitly conceived as an “optional alternative to work requirements,” offering job training, career planning, and employment services to enrollees who chose to participate without conditioning coverage on employment.
North Carolina’s approach attempted to thread a needle: providing workforce development support that Republicans could point to as promoting self-sufficiency while avoiding mandatory work requirements that could create coverage losses. The voluntary program model drew from Montana’s HELP-Link program, which has provided optional employment services to Medicaid enrollees since 2015.
Current Policy and Waiver Status#
SB 403 and Legislative Action
The One Big Beautiful Bill Act’s passage in July 2025 transformed North Carolina’s policy landscape. With federal work requirements now mandatory for expansion adults by January 2027, the optional workforce development approach became moot.
Senate Bill 403, passed by the North Carolina Senate 34-12 in April 2025, directed NCDHHS to begin negotiations with CMS to develop a work requirement plan and required the state to implement any CMS-approved work requirements. The bill strengthened the original expansion law’s trigger language, making implementation mandatory rather than discretionary once federal approval was obtained.
SB 403’s sponsors framed the legislation as protective: by proactively embracing work requirements, they argued, North Carolina would signal alignment with federal policy and potentially protect the state’s 90% federal match rate for expansion. Representative Donny Lambeth, a primary sponsor, stated the bill was “meant as a shield to protect expansion” against potential federal funding cuts.
The legislation passed despite opposition from advocacy organizations, healthcare providers, and the state’s Democratic congressional delegation. Critics noted that 60% of expansion enrollees already work, while the remaining 40% do not work because they are disabled, too ill to work, attend school, or serve as caregivers. NCDHHS warned that as many as 255,000 North Carolinians could lose coverage if work requirements are implemented, with 83% of those at risk having gained coverage only through the recent expansion.
Political Environment
North Carolina’s divided government creates implementation uncertainty. Governor Josh Stein, a Democrat, is likely to resist aggressive work requirement enforcement, but Republican supermajorities in the state Senate can override gubernatorial vetoes. The state House margin is narrower, with veto override depending on one or two votes.
The state’s Republican legislative leadership has championed work requirements conceptually but has also invested substantial political capital in the expansion itself. The trigger provision in the original expansion law, requiring discontinuation if federal funding changes, creates risk that aggressive work requirement implementation leading to coverage losses could generate political backlash against expansion’s Republican architects.
NCDHHS Secretary Dev Sangvai has indicated the agency is “bracing for any and all possibilities” while focusing on understanding what federal proposals would mean for North Carolina.
Defining Characteristics#
Recent Expansion with Abbreviated Timeline
North Carolina’s defining characteristic for work requirement implementation is time compression. The state expanded Medicaid in December 2023, barely two years before federal work requirements take effect. Unlike states that expanded in 2014 and have spent a decade stabilizing enrollment, building administrative systems, and developing provider networks, North Carolina must simultaneously mature its expansion program and build work requirement infrastructure.
The state has 10 months from OB3’s passage to launch verification systems, train eligibility workers, establish exemption processes, and communicate requirements to 650,000+ expansion adults. This timeline is tighter than any prior work requirement implementation attempt and occurs alongside ongoing enrollment growth.
Managed Care Infrastructure
North Carolina transitioned to Medicaid managed care relatively recently, launching the Standard Plan program in July 2021. Five managed care organizations serve the Standard Plan population statewide: AmeriHealth Caritas, Carolina Complete Health, Healthy Blue, UnitedHealthcare Community Plan, and WellCare. Four Local Management Entities/Managed Care Organizations (LME/MCOs) serve behavioral health, intellectual/developmental disability, and substance use disorder populations through the Tailored Plan program.
This managed care infrastructure provides potential integration points for work requirement support. MCOs have existing member communication channels, care coordination capacity, and community partnerships that could support compliance assistance. However, MCOs are also managing their own Standard Plan re-procurement process (contracts ending December 2027), creating organizational bandwidth constraints during the implementation period.
Workforce Development Foundation
The voluntary workforce development program developed under the expansion legislation provides infrastructure that could support work requirement implementation. The December 2024 workforce report outlined connections to NCWorks (the state workforce development system), community college training programs, and employer partnerships that could be adapted for mandatory rather than voluntary participation.
Whether this foundation translates to effective work requirement support depends on capacity. Voluntary programs serving motivated self-selecting participants differ fundamentally from mandatory systems serving populations facing complex barriers. The infrastructure exists, but scaling it to serve hundreds of thousands of enrollees facing compliance requirements has not been attempted.
Rural Hospital Vulnerability
North Carolina’s rural hospitals face acute financial stress. Federal Medicaid cuts combined with work requirement coverage losses could trigger the expansion discontinuation trigger, threatening hospitals that have seen substantial improvement in uncompensated care since expansion launched. ECU Health, serving 29 counties in eastern North Carolina, projects $50 million in losses from existing Medicaid reimbursement cuts. Scotland Health in one of the state’s poorest counties faces “multiple whammy” pressures from concentrated Medicaid populations and limited alternative revenue sources.
Hospital associations have supported expansion but raised concerns about work requirement implementation that could reverse coverage gains and restore the charity care burdens expansion was designed to address.
Expected Policy Posture and Timeline#
Anticipated Approach: Uncertain, Potentially Moderate
North Carolina’s implementation philosophy remains unclear as of late 2025. The state lacks both the negative experience that pushed Georgia toward zero-friction design and the automation infrastructure Ohio is building. Several factors point toward moderate implementation:
The state’s substantial investment in workforce development infrastructure suggests interest in actually connecting enrollees to employment rather than simply creating compliance barriers. The voluntary program’s design emphasized “upskilling people who already have jobs” rather than punitive enforcement.
Rural political representation in the Republican caucus creates awareness of how coverage losses would affect their constituents. Eastern North Carolina counties that voted heavily for Trump in 2024 also have the highest Medicaid enrollment rates.
However, the tight timeline, lack of prior infrastructure, and political pressure to demonstrate work requirements create real risk of implementation that prioritizes speed over accuracy.
Timeline
The December 2026 deadline leaves North Carolina with an aggressive implementation schedule. The state must develop verification systems, exemption processes, and communication strategies while CMS guidance remains incomplete and federal-state negotiations continue.
County Departments of Social Services will administer eligibility determinations, creating 100 potential implementation variations. Whether the state can maintain consistency across counties ranging from urban Mecklenburg (Charlotte) to rural Scotland (poverty rate exceeding 28%) represents a fundamental implementation challenge.
Summary: What North Carolina Is Expected to Do#
North Carolina will implement federal work requirements for its 650,000+ expansion adults, but implementation approach remains undetermined. The state’s recent expansion, abbreviated timeline, and lack of prior work requirement experience create substantial execution risk.
The voluntary workforce development infrastructure developed since expansion could support compliance assistance if adequately resourced and scaled. Whether that infrastructure becomes the foundation for supportive implementation or remains an under-utilized appendage to a compliance-focused system depends on state leadership decisions not yet made.
At-risk population estimates suggest 255,000 North Carolinians could face coverage loss, with the vast majority representing people who recently gained coverage through expansion. Whether the state can build systems accurate enough to distinguish people meeting requirements or qualifying for exemptions from those genuinely not complying will determine whether work requirements function as intended policy or administrative barriers.
Rural eastern North Carolina, with the highest expansion enrollment rates and least employment opportunity, will test whether work requirements can operate without geographic concentration of coverage losses. The Lumbee population, lacking full federal tribal recognition, represents an exemption ambiguity requiring state policy choices.
North Carolina offers the clearest test case for work requirement implementation in a recently expanding state with limited infrastructure and compressed timeline. If the state maintains coverage while meeting federal requirements, it provides a model for late-expanding states. If implementation creates substantial coverage losses concentrated among the recently covered, it demonstrates that work requirements cannot be implemented responsibly without adequate preparation time.
Cross-Program Context#
SNAP E&T Alignment
North Carolina operates SNAP Employment & Training separately from Medicaid. No automatic deemed compliance currently exists between programs. An enrollee meeting SNAP ABAWD requirements must separately document compliance for Medicaid. Building cross-program verification would reduce duplicative burden but requires system integration that does not currently exist.
TANF Work Requirements
Work First, North Carolina’s TANF program, includes work requirements for a different population. Infrastructure and lessons exist but have not been adapted for Medicaid scale.
Provider Tax and Expansion Trigger
North Carolina funds the state share of Medicaid expansion through hospital assessments. The expansion law includes a trigger requiring discontinuation if specified funding sources fall short. OB3’s provider tax caps at rates lower than North Carolina currently collects create risk that the expansion trigger could activate, potentially ending the expansion program entirely rather than implementing work requirements within it.
Marketplace Infrastructure
North Carolina operates on the federally facilitated marketplace. Expansion adults losing Medicaid may qualify for marketplace coverage with premium tax credits, though the December 2025 expiration of enhanced ACA subsidies creates uncertainty about fallback affordability.