Healthcare is Hard: A Podcast for Insiders

Medicaid Uncovered: Decoding the System

May 15, 2025

Kody Kinsley, former North Carolina Secretary of Health and Human Services and current Milken Institute advisor, brings hands-on Medicaid and behavioral health experience. He walks through how state mega-agencies operate. He explains federal-state financing, managed care mechanics, expansion dynamics, budget scenarios, provider taxes, and real-world pilots linking social care to savings.

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INSIGHT

State Health Agencies Function As Mega Agencies

State health agencies are "mega agencies" combining Medicaid financing, public health, regulation, and direct care, touching every resident multiple times daily.
In North Carolina this equates to an $36 billion budget, 18,000 staff, and roughly three-quarters federal funding, mostly Medicaid dollars.

INSIGHT

Medicaid Dominates State Budgets And Relies On Federal Funding

Medicaid typically represents up to 30% of a state's budget and is often the first or second largest budget item.
At least half of those Medicaid dollars in every state come from the federal government, so federal cuts deeply impact states.

INSIGHT

Medicaid Cut Negotiations Will Stretch Over Months

Congressional budget processes are slow and messy; ambitious deadlines rarely stick, so Medicaid cut negotiations will likely be drawn out.
The Energy and Commerce target ($880B over 10 years) focuses on Medicaid/Medicare, but faces many political stops.

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Kody Kinsley has been called many things—operator, innovator, Medicaid “nerd”—but above all, he’s a fierce advocate for the health and well-being of the populations Medicaid serves. Now a senior advisor at the Milken Institute and recently North Carolina’s Secretary of Health and Human Services, Kinsley joins Keith Figlioli for a wide-ranging conversation about how Medicaid works, why it matters, and where innovation is reshaping its future.

A native of North Carolina, Kinsley brings personal experience and professional depth to his perspective. Growing up uninsured, he watched his mother navigate pediatric clinics, sliding-scale providers, and supply closets offering free samples to keep her kids healthy. That formative exposure ultimately propelled him into a career spanning healthcare operations, behavioral health, public policy, and government leadership.

As North Carolina’s health secretary, Kinsley led one of the country’s largest and most complex human services agencies, overseeing everything from Medicaid operations and public health to psychiatric hospitals and child welfare. He played a central role in advancing Medicaid expansion in the state—an achievement shaped by bipartisan negotiation, careful balancing of federal and state resources, and a deep understanding of the healthcare landscape.

In this episode, Kinsley and Keith cover:

The structural realities behind state Medicaid programs. Kinsley describes how mega-agencies like North Carolina’s bring together financing, public health, regulation, and direct care delivery—touching millions of lives daily, often invisibly.
Federal-state dynamics and looming policy shifts. From federal match rates to provider taxes and budget triggers, Kinsley explains the intricacies of how money moves between federal and state governments—and what’s at stake when Congress debates Medicaid cuts or structural reforms.
The human cost behind budget debates. Behind every line item is a person: whether it’s dental coverage, hospice services, or in-home care, Kinsley argues that policymakers must weigh the downstream impacts of funding decisions on real lives and long-term system costs.
Bright spots and innovation. Kinsley highlights North Carolina’s “Healthy Opportunities” pilot—one of the first initiatives nationally to use Medicaid dollars for non-medical needs like food, housing, and transportation. Early results show promise, including improved outcomes and significant cost savings, suggesting a roadmap for other states.
Looking forward. While political winds may shift and financial pressures mount, Kinsley remains optimistic. He points to growing public support for Medicaid and hopes the nation can move beyond divisive debates over whether healthcare is a right or privilege—focusing instead on smarter, more sustainable ways to deliver care.

To hear Kody Kinsley and Keith Figlioli unpack these topics and more, listen to this episode of Healthcare is Hard: A Podcast for Insiders.