North Carolina Hospitals Face Policy Battles Ahead

Despite their political clout, hospitals likely to see setbacks on Medicaid expansion, competition limits, and tax breaks.

Apr. 15, 2026 at 9:54pm

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A moody, cinematic painting of a lone hospital bed in a dimly lit room, with warm sunlight streaming in through a window and casting deep shadows, conceptually representing the challenges facing the state's powerful hospital industry.As North Carolina hospitals fight to preserve their political and financial clout, a somber mood settles over the state's healthcare landscape.Today in Raleigh

North Carolina's powerful hospital industry is bracing for potential policy losses in the coming 18 months, as state lawmakers respond to rising healthcare costs by scrutinizing Medicaid expansion funding, hospital competition limits, and tax exemptions. While hospitals have long been influential in Raleigh, experts predict they will not emerge unscathed from these looming political battles.

Why it matters

The outcome of these policy debates could have significant implications for healthcare access, costs, and the financial sustainability of North Carolina's hospital networks. As medical spending continues to outpace the region and nation, policymakers are under pressure to rein in hospital-related expenses.

The details

North Carolina hospitals have been central to controversies around Medicaid expansion, with the industry helping broker a deal that included new hospital fees to cover the state's share. But federal changes now threaten that creative accounting, forcing the legislature to either chip in billions or let expansion end. Reformers also aim to increase hospital competition by limiting certificate-of-need regulations and property/sales tax exemptions that critics say exceed the value of charity care provided.

  • In the next couple years, the General Assembly must address the funding for Medicaid expansion.
  • North Carolina House and Senate committees are currently studying potential reforms to the state's sales and property tax exemptions for nonprofit hospitals.

The players

North Carolina Hospitals

The sprawling networks of hospitals, physician practices, clinics, and urgent care facilities that wield significant political influence in the state.

Tim Moore

Former North Carolina House Speaker who helped convince the legislature to expand Medicaid.

Phil Berger

Soon-to-be-former North Carolina Senate leader who also supported Medicaid expansion.

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What they’re saying

“Despite their political clout, North Carolina hospitals face likely setbacks on Medicaid expansion funding, competition limits and tax breaks as lawmakers respond to rising costs.”

— John Hood, John Locke Foundation Board Member

What’s next

The General Assembly must address the funding for Medicaid expansion in the next couple of years, and House and Senate committees are currently studying potential reforms to the state's sales and property tax exemptions for nonprofit hospitals.

The takeaway

As healthcare costs continue to rise in North Carolina, the powerful hospital industry faces an uphill battle to maintain its policy influence and financial advantages in the face of growing pressure from state lawmakers to rein in spending.