By Dan Gorenstein and Leslie Walker
President Trump’s One Big Beautiful Bill Act is now the law of the land.
Just before House Republicans cast their final votes to pass the legislation, Republican Speaker Mike Johnson declared, “We have a big job to finish, and that’s why we’re here.”
The work has just begun, however, for state health officials across the country. They now face the difficult task of putting many of this law’s health reforms into action — some at breakneck speed. Alongside governors and state legislators they must also grapple with what the steep funding cuts will mean for government health care programs, patients and providers.
“The road ahead is daunting,” said Kody Kinsley, who served as North Carolina’s health and human services secretary until early this year.
Kinsley is known for working well with people across the political spectrum. He served in the U.S. Department of Treasury under both Presidents Obama and Trump, and helped North Carolina enact Medicaid expansion with overwhelming bipartisan support in 2023.
Whether to continue covering that expansion population is one of many hard decisions now facing state lawmakers and officials as they wrestle with the fallout of this new law.
“Since the Affordable Care Act 15 years ago, this is the most sweeping change to health care that we have seen,” Kinsley told Tradeoffs in a wide-ranging interview.
The following excerpt from our conversation has been edited for length and clarity:
TRADEOFFS: In one word, Kody, how would you describe the challenge ahead of states as they move to put the Big Beautiful Bill into action?
KODY KINSLEY: Daunting.
I mean, bottom line, this is a health care bill — and it will require significant implementation at the state level at, frankly, record speeds.
TRADEOFFS: And what are state health officials literally doing right now? So they’re feeling overwhelmed, but what are they doing to try to do the best job that they can do?
KINSLEY: Well, look, a big source of that worry and fear is the amount of uncertainty that we have. The bill in its current form only saw the light of day a week and a half ago. And so, right now, the first thing that folks are doing is just trying to read it and understand it and make sure they’re finding all of the little nits and bits that would impact them, to make sure they can begin to understand the implementation. We’ve got a long road ahead of even just trying to build out the glossary and the definitions here.
TRADEOFFS: We’re talking about a law that’s close to 1,000 pages long.
KINSLEY: Yes. We’re going to see Centers for Medicaid and Medicare Services doing implementation guidance. We’re going to see litigation. And all of those things will impact how this is implemented. So state officials are trying to follow along through all of that — and then provide the advice necessary to their governors, to their legislative partners on what they’re going to need to do this.
TRADEOFFS: Despite all that uncertainty, there are some major changes to the Medicaid program that states know they will need to implement, as you said, at record speed.
For example, by the end of next year, states need to verify that somewhere close to 20 million adults are either working, volunteering or going to school in order to stay on Medicaid.
Experts have raised concerns that if states’ systems for verifying this information are too burdensome, lots of people could get tripped up by red tape and, wrongfully, lose their coverage.
You’ve had to set up similar technology before. What’s your advice to states here?
KINSLEY: So, during the COVID period when people were on Medicaid for extended periods of time, North Carolina used that opportunity to make some major technology updates. And one of the things that we committed ourselves to was having a very high utilization of something called ex-parte data — essentially data through third party vendors like Equifax or Experian — to pull income information. And getting the technology right allowed us to move people through the eligibility process much faster than we had prior. We could actually get about 40 percent of people through the eligibility process without ever having to talk to a human. That had never been done before in North Carolina Medicaid.
Something that’s also really important in this is making sure that CMS gives states the policy flexibility that they need to be able to do that.
TRADEOFFS: What I’m hearing you say, Kody, is: Here we are in the 21st century, and it’s so much easier to sort of scrape data from any number of sources. In theory, states could be doing more of that work in determining eligibility, and the more that the state can do that, the less we’re going to have eligible people lose their coverage.
KINSLEY: That’s right. And, you know — and I should have started here, so let me say this now — it always was, and it always will be the interest of every state Medicaid program to accurately determine eligibility to make sure that the people that are eligible under the law are on, and the people who are not eligible under the law are not. Period.
What we want to try to do through these technological improvements is get rid of the inaccurate eligibility determinations. So, if you can move it more online, that makes it better. If you can make it more passive so that the person’s not like, ”You know what? I don’t know where my five pay stubs are.” If all they have to do is look at the form and be like, “Yep, that’s accurate,” that’s good.
TRADEOFFS: And not just good for people on Medicaid. This is going to be good for the states, too right? I mean this just sounds much more efficient.
KINSLEY: That’s right. For example, North Carolina does eligibility checks at the county level. That’s 100 county departments of social service. Those are 100 different teams. That is a significant amount of work that those county government workers will have to face — and so making their lives easier is an important goal as well.
TRADEOFFS: Obviously different states are going to have different approaches to this. Do you think we could see big disparities in the number of people losing Medicaid simply because some states have better software than others?
KINSLEY: Absolutely. I mean, the common joke is, is if you’ve seen one Medicaid program, you’ve seen one Medicaid program, right? And that is a benefit — you get the opportunity for the laboratories of democracy to demonstrate how things work functionally. But then you also have the challenges that come along with that. And so states do this differently, and there have been exactly zero successes at implementing work requirements in this country. That’s one of the challenges I’m worried about.
TRADEOFFS: Aside from these challenges, states will soon face difficult financial choices. Money is going to become tighter. When you think about North Carolina, in particular, what’s an example of a decision that’s going to be really hard?
KINSLEY: The North Carolina General Assembly will have to wrestle right out of the gate with over 660,000 people losing their health care coverage. These are folks that gained coverage very recently through North Carolina’s expanded Medicaid program. North Carolina lawmakers put a trigger on the books when they passed expansion a few years ago that essentially says, if the state incurs any increased cost for the expansion population, then the [Medicaid expansion] program would automatically sunset. The requirement by the federal government to add work requirements for the [Medicaid] expansion population will cost the state money. So lawmakers can either adjust that [trigger] law in some way or wrestle with the issue another way. But if they choose to do nothing, then more than 660,000 individuals will lose their health care coverage.
TRADEOFFS: Wow, so that is a huge decision. It’s also pretty specific to North Carolina. So I guess I’m wondering, when you think more generally about state health officials across the country, what’s a tough choice that they’re all about to face?
KINSLEY: Let’s zoom out to the broader budgetary situation we are in. I mean, most states are facing budget shortfalls, with the tightening of a lot of the federal funding post-COVID, you know. Medicaid changes are happening alongside a lot of other changes — major cuts to the SNAP program, a number of other grants getting canceled, challenges that public universities are facing. All these roads lead back to the respective state’s budgets. States just don’t have a lot of places to turn for money right now. And states, unlike the federal government, balance their budgets.
I can tell you from my experience when we were facing tight budgetary moments, it takes a lot of program cuts to make up a dollar, right? So we had looked at like, could we cancel the entire dental program? The entire dental program would have “saved” — I’m air-quoting here — “saved” $150 million. Right now these changes [in the Big Beautiful Bill] are forecasting to remove $32 billion from the Medicaid program over the next 10 years in North Carolina alone.
TRADEOFFS: Is that sort of the crude math? At the most basic level, the question is how is the state going to make up $3.2 billion a year over the next 10 years?
KINSLEY: I can cut to the chase: The answer is that it can’t. And so, you know, it just simply won’t. But the question is which of the losses will it try [to mitigate], like what pennies will it throw in the direction of some of those dollars where it is believed to potentially make the most difference? Will they go toward, you know, coverage, or will it be toward a rural hospital emergency fund? Those sorts of tradeoffs are really challenging.
TRADEOFFS: Because at the end of the day, I mean, this is likely going to lead to either a cut in health care services, a reduction in eligibility for health care coverage or lower reimbursement rates for providers — or some combination of all three.
KINSLEY: That’s right. Yeah, I expect it’ll be a combination of all three.
TRADEOFFS: You spent three years of your life, Kody, as North Carolina’s health secretary, working to improve the state’s health care programs and, in the case of Medicaid, significantly growing that program. I know that’s an achievement you are particularly proud of, especially given its bipartisan backing.
How do you feel, right now, knowing that work could be in jeopardy?
KINSLEY: I’m probably of two minds. You know, frustrated and sad that we seem to be going backwards in the way of coverage access, going backwards in the way of trying to promote health and well-being as a priority. But also, I recognize that if I were to step outside of the policy world that I live in and go sit down with people at a kitchen table, there are not many people in this country who believe health care is working well.
I grew up in North Carolina uninsured — I remember watching my mother navigate the health system that looked like, you know, providers [paid] on a sliding scale, you know, pharmacy samples out of a supply closet. Fast forward 40 years we’ve put trillions of dollars into health care. We have record coverage rates. We’ve made huge progress on cancer cure rates. But you go find the version of my mother today and that mother navigates a health care system that I think is even more confusing, even harder and more frustrating.
TRADEOFFS: And even more expensive.
KINSLEY: And even more expensive. And that public sentiment demanded major changes. I don’t think the changes that we have seen out of Congress are the changes that we needed. But I do think that someone is being responsive to the frustrated public sentiment that we have. And I think what is missing in this moment is a better vision for what health care should look like.
Dan Gorenstein is the executive editor of Tradeoffs, a nonprofit health policy news organization. Reporter Leslie Walker produced a version of this story for the Tradeoffs podcast. You can listen below to Tradeoffs’ full interview with Kinsley below:
Republish our articles for free, online or in print, under a Creative Commons license.
English (US) ·