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North Carolina Medicaid covers one-fifth of the state’s population and makes up approximately one-third of the budget. Yet the state has experienced increasing costs and worsening health outcomes over the past decade, while socioeconomic disparities persist among communities. In this article, the authors explore the factors that influence these trends and provide a series of policy lessons to inform the state’s current reform efforts following the recent approval of North Carolina’s Section 1115 waiver by the Centers for Medicare and Medicaid Services. The authors used health, social, and financial data from the state Department of Health and Human Services, the Robert Wood Johnson Foundation, and the University of North Carolina to identify the highest cost counties in North Carolina. They found higher per beneficiary spending to be inversely related to population health, with many counties with the most expensive beneficiaries also reporting poor health outcomes. These trends appear to be attributed to a breakdown in access to basic health services, with high cost counties often lacking adequate numbers of health care providers and possessing limited health care services, leading patients to primarily engage the health care system in a reactive manner and predominantly in institutional care settings. To illustrate this pattern, the authors developed case studies of Tyrrell County and Graham County, which respectively are home to the state’s worst health outcomes and most expensive Medicaid beneficiaries. The authors combined stories of these counties with the larger historical trends to offer policy recommendations to help reorient North Carolina Medicaid around patient needs. The results shed light on traditionally understudied hotspots of cost and poor outcomes in North Carolina, while proposing tangible steps to support reform.

Library of Congress Subject Headings

Health care reform, Medical policy, Medicaid, Health services accessibility, North Carolina, Empirical