Stein orders NC lawmakers back into session to address Medicaid funding shortfalls

North Carolina lawmakers must return to Raleigh later this month, Gov. Josh Stein said Thursday, using his constitutional authority to call for a special legislative session.

It's a rare move that's only been used a few times in recent decades. But Stein said the extreme measure is necessary to fix an issue that lawmakers failed to solve on their own: Medicaid funding.

“It is time to fund Medicaid, because if they fail to do so, people are suffering, and it is unacceptable,” Stein, a Democrat, told reporters at a news conference at the state Capitol building Thursday.

Republican legislative leaders say Stein is politicizing the situation. Lawmakers adjourned last month with no plans to vote on major legislation for the rest of the year, meaning a new state budget is unlikely to be approved until 2026 at the earliest.

House Speaker Destin Hall said Thursday that while he thinks Stein is needlessly speeding up Medicaid cuts for political purposes, he does agree that Medicaid funding is an issue the legislature should address. He called on the state Senate to pass one or more of the spending bills his chamber already approved.

“The House has done its job to fund Medicaid with clean bills and is prepared to do more if needed,” Hall said in a written statement. “We need to resolve this matter quickly to protect patients, support providers, and ensure the long-term stability of North Carolina’s Medicaid program.”

Even though the GOP holds large majorities in both legislative chambers, political disputes between the state House and Senate torpedoed their attempts to negotiate a new budget.

Cuts have already gone into place for the health insurance program for low-income families, which provides coverage for nearly one in every three North Carolinians. Stein said the program's money will eventually run out entirely, unless state lawmakers approve the funding needed or change state law to allow him to access money in a Medicaid savings reserve that the governor is currently blocked from using.

Betsy MacMichael, whose daughter is a Durham Medicaid recipient, spoke alongside Stein Thursday. Her 33-year-old daughter has a rare neurological disorder, she said, but has also been able to get her own apartment and build a life on her own thanks to the intensive medical care she receives, funded by Medicaid. She fears cuts could spell the end of those programs for her daughter, and possibly the end of her ability to live her life as the independent woman she wants to be.

“Her condition comes with a lot of medical issues,” MacMichael told reporters. “Thankfully, she's got a great primary care doctor, neuroophthalmologist, physical therapist, neurologist, urologist, geneticist, you get the picture. Medicaid is her health insurance, but it also literally keeps our daughter alive and living well in the community. … For nine hours a day, she gets the help she needs to cook, shower, dress, check her email, take her meds, get to appointments and work, to name a few essential ways it helps.”

Another Medicaid patient with extensive health needs related to Muscular Dystrophy, Demi Eckhoff, spoke about her fears that losing coverage will end her ability to live and work in the community.

“They assist me with all daily living activities — such as feeding, hydrogen care, toileting, moving me into my wheelchair, inviting me to various appointments, assisting me with my medical equipment and, most importantly, they help me be a proactive citizen in my community,” said Eckhoff, who works as a dietician in Durham.

Stein, GOP trade blame

Some Republican leaders have questioned whether the cuts to Medicaid needed to go into place as quickly as Stein's Department of Health and Human Services has done so. They've said they think the state could've held out a few months longer to give the legislature time to figure something out, and that Stein is unfairly politicizing the issue.

Stein, however, told reporters Thursday there’s no guarantee the legislature will approve a new budget next year either and that it would be financially irresponsible to keep funding Medicaid at levels beyond what’s currently approved.

“We're one of two states in this nation that don't have a budget this year,” Stein said, adding: “What guarantees do we have that they will come up with a budget next year? There are none. So we cannot budget based on hopes and prayers. We have to budget on actions, and they have not acted.”

But legal battles have already complicated the issue. Stein's call for a new special session came just days after a judge ordered a temporary halt to some of the Medicaid cuts, part of a lawsuit brought by families of children with autism. Lauren Horsch, a spokesperson for Senate leader Phil Berger, drew a connection between the order and the timing of Stein’s announcement Thursday.

"Gov. Stein’s self-inflicted 'crisis' is not an extraordinary occasion by any measure," Horsch said. "Now that the courts have stepped in to block some of his politically motivated cuts, he’s attempting a new stunt to pass the buck."

While Stein can order lawmakers back into session, however, he can't order them to actually take a vote. Lawmakers could simply return to session and then quickly gavel out without taking any action, should they choose; Horsch didn’t respond to an inquiry as to whether Senate Republicans would favor that option. 

Fight over children's hospital funding

Republican leaders acknowledge that Medicaid is underfunded; the House and Senate each voted to spend hundreds of millions more on Medicaid. But neither chamber has taken a vote on the other chamber’s proposal, and so nothing has advanced toward becoming law. At the heart of their dispute is an unrelated fight over funding for the construction of a new children’s hospital in the state. House Republicans want to negotiate that as part of the broader budget fight, but Senate Republicans have wanted to tie it to this Medicaid bill.

Stein said he agrees with the Senate on the broader issue of funding — the House wants to cut funding for the children's hospital; the Senate doen't — but that he thinks the Senate is wrong to try tying Medicaid funding to that unrelated budget dispute. The House has already passed what Stein called a “clean” bill to fund Medicaid, and Stein urged the Senate to reverse its stance and agree to pass that.

“It is absolutely wrong — and frankly cruel — to use sick and vulnerable people as a bargaining chip on an issue entirely unrelated to Medicaid funding,” Stein said Thursday.

Horsch said if Stein is truly worried about people’s health, he should’ve used an infusion of cash from the legislature earlier this year on paying Medicaid bills rather than paying for administrative needs within the Department of Health and Human Services.

“The General Assembly appropriated $600 million to the Medicaid rebase,” she said, referring to an August vote. “And instead of prioritizing funding for services, Governor Stein decided funding bureaucracy was more important.”