One Bad Brutal Boondoggle - The One Big Beautiful Bill and North Carolina (Part 1)
Health Care and SNAP Issues
The “One Big Beautiful Bill” (OBBB) was signed into law in July 2025 and extends many of the features established in the Tax Cuts and Jobs Act of 2017. Most Americans are keenly aware that the bill’s tax cuts will benefit the wealthiest people the most and disadvantage those at the lower end of the income spectrum. For example, the highest-earning 5% of Americans are projected to receive more than 45% of the tax cuts whereas the lowest-earning 20% of Americans will receive less than 1% of the tax cuts. State-level impacts will be broad-based, especially in terms of the pernicious effects on the social safety net.
This article (from our September 2025 ICLT newsletter) focused on the OBBB’s impacts on North Carolina related to Medicaid, Medicare, and the SNAP program:
Over 600,000 North Carolina Medicaid beneficiaries could lose their health insurance,
Rural North Carolina hospitals dependent on Medicaid funding to sustain operations may be forced to close or reduce operations,
Potential job losses, especially in rural North Carolina communities, where the Medicaid-supported local hospital might be a primary source of employment,
Potential increased out-of-pocket spending for North Carolina Medicare beneficiaries,
A reduction in food-purchasing assistance benefits for the 1.4 million North Carolinians enrolled in the Supplemental Nutrition Assistance Program (SNAP, or Food and Nutrition Services – Food Stamps)
In our October newsletter we focused on the OBBB’s impacts in North Carolina on immigration, education, energy, and public broadcasting.
Medicaid Impacts
Medicare beneficiaries could face increased out-of-pocket spending as insurance payments to North Carolina hospitals, physicians, health providers and Medicare Advantage plans decline. This will likely reduce access to care for the state’s elderly. Growth in the federal deficit due to the OBBB is projected to increase the national debt over the next decade by over $3 trillion. Mandatory cuts (sequestration) to Medicare are imposed by existing law as the federal deficit increases and could result in about a $500 billion cut to beneficiaries nationwide.
Certain groups of documented immigrants currently eligible for Medicare – refugees, people granted asylum, people with Temporary Protected Status, survivors of human trafficking, survivors of domestic violence, and individuals granted humanitarian parole – will lose their eligibility, regardless of how long they have worked and paid into the system.
Supplemental Nutritional Assistance Program (SNAP) Impacts
The potential impact of the OBBB on SNAP benefits in North Carolina is a reduction in benefits for the 1.4 million enrollees (~13% of the state’s population) who rely on the program for food-purchasing assistance. The reasons:
It limits future increases to the Thrifty Food Plan which is used to determine SNAP benefit levels; these limits are not anticipated to keep up with the increases in the cost of food, expansion of existing work requirements, and
States may choose to deny coverage to eligible people rather than comply with a payment error* rate penalty imposed by the OBBB that withdraws federal funding of the program if the error threshold is exceeded.
In addition to the personal harm that this poses for individuals, it is anticipated that the demand for food from resource-strapped local food banks will increase, possibly leading to food shortages at these important outlets.
*”Payment error” is a performance measure: if states inaccurately determine eligibility/benefits, the OBBB requires the state to pay a portion (5-15%) of the SNAP costs if the payment error is equal to or greater than 6%.
Sources and Further Reading
What is the “One Big Beautiful Bill” and Its Impact?
“Big Beautiful Bill” Could Unravel NC’s Medicaid Expansion
The Truth About the One Big Beautiful Bill Act’s Cuts to Medicaid and Medicare
House Reconciliation Bill Could Trigger $500 Billion in Mandatory Medicare Cuts
This article was originally shared in the September 2025 issue of the Indivisible CLT Newsletter. Original article by Galen Smith and Carrie Phillips.
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