STATE NEWS – What North Carolina’s state budget debate means for Medicaid

Alternative Headline: NC Faces Medicaid Budget Gap

[MM Curator Summary]: North Carolina faces disputes over funding priorities amid a $200 million Medicaid budget shortfall, as well as disputes over charter school authority between the State Board of Education and the Charter Schools Review Board.

========================================

Each week, join Dawn Vaughan for The News & Observer and NC Insider’s Under the Dome podcast, an in-depth analysis of topics in state government and politics for North Carolina.

Good morning and welcome to Under the Dome. I’m Sophia Bailly.

“No Kings” protests are in the forecast this weekend as community activists plan to take to the streets to oppose the Trump administration’s immigration crackdown, which is escalating in the hot spot of it all: Los Angeles.

For now, here is a rundown of current affairs in the Triangle.

NC MEDICAID FUNDING AND CHANGES

Potential federal cuts and changes to Medicaid — the state- and federally funded program that provides health care to millions of North Carolinians — have drawn attention. State-level changes, however, have received less, though they’re closely connected.

The N.C. Department of Health and Human Services says both House and Senate budgets fall short of fully funding the “rebase,” which adjusts for fluctuating Medicaid costs. Based on its annual cost forecast, DHHS requested $700 million. The House and Senate budget proposals — still in debate — include $500 million.

“Both the House and the Senate budget underfund the program at the levels that we think are required in order for us to meet that mission of Medicaid serving North Carolina,” said Jay Ludlum, the state’s deputy secretary for NC Medicaid, in an interview with The N&O.

Ludlum said the rebase has been underfunded in previous years too, but federal relief money tied to COVID-19 helped make up the difference.

A $200 million shortfall in state funding would amount to about $600 million to $750 million in total lost funds once the lost federal match is factored in, he said.

“There are some hard decisions that will have to be made soon,” Ludlum said when asked what that funding gap could mean.

Rep. Donny Lambeth, a senior House budget writer who is heavily involved in health legislation, said lawmakers rely on General Assembly fiscal staff for Medicaid rebase projections.

“That’s the number they tell us,” he said. “Unless they can reconcile their differences (the state and fiscal staff), we don’t have anything really to talk about.

“Every year they say we’re not doing enough,” Lambeth said, adding that because the legislature is in session, it can adjust the funding later if needed. With enrollment expected to drop under federal changes to the program and continued uncertainty around Medicaid, he said, lawmakers may be better suited to tackle this later.

Healthy Opportunities Program, a Medicaid pilot project, also isn’t funded in both the House and Senate budgets. It provides non-medical help, such as acquiring food, paying utilities, rides to doctors’ appointments and more for those who need it.

“It was a pilot program when we had a lot of money coming in through the expansion dollars,” Lambeth said, a bonus provided for North Carolina to expand Medicaid.

“It’s not so much that we’re opposed to it,” he said, but now “there’s very little discretionary money.” He said he didn’t make the decision not to fund it, but that it fell to the House and Senate health chairs to recommend.

He said if the program is beneficial, it should be paid by whoever benefits from it, such as through the prepaid health plans (PHPs) under the state’s Medicaid managed care program, which receive a capitation rate to provide services to enrolled individuals.

The Healthy Opportunities Program isn’t required by the federal government under Medicaid and uses a Medicaid waiver. Cutting it is a consequence of less revenue and potential federal cuts, Lambeth said.

“There is a little bit of that happening here. There are other optional services that I’ve heard — like for example, dental for Medicaid — that’s an optional service,” he said.

“We do not have to provide that as a state. And there’s a number of optional services like that that are being questioned,” he said.

– Luciana Perez Uribe Guinassi and Jordan Schrader

LAWMAKERS WANT TO TRANSFER AUTHORITY OVER CHARTER SCHOOLS

The N.C. Senate Education Committee backed a bill on Thursday that transfers more power to the Charter Schools Review Board, even though the State Board of Education and State Superintendent Mo Green say the move is unconstitutional.

House Bill 832 includes several charter school provisions. It includes that the State Board can only approve rules and policies for charter schools that have been approved first by the Review Board. The bill would also have the executive director of the Office of Charter Schools report to the Review Board, instead of to the superintendent.

“The Superintendent and State Board of Education take seriously their constitutional duties to guard and maintain the right to a free public education for every student in North Carolina,” according to a letter sent to Education Committee members. “The proposed provisions in the PCS of House Bill 832 would undermine the Superintendent and State Board’s ability and constitutional authority for ensuring every public school student has access to an excellent public education.”

But Sen. Michael Lee, a Republican from New Hanover County, said the provisions are constitutional because the authority of the state board and superintendent are subject to the laws of the General Assembly.

The Republican-controlled General Assembly has been steadily stripping away power from the Democratic majority on the State Board of Education. For instance, the State Board is now relegated to handling appeals of charter school approval and renewal decisions made by the Review Board.

The majority of the Review Board’s members are appointed by the General Assembly.

“The Charter Schools Review Board is by its name, by its mission, by its constitution, is laser-focused on dealing with charter schools,” said Sen. Brad Overcash, a Republican from Gaston County. “They have the expertise. They have the niche practice, if you will, of dealing with that. And from my perspective, I think it’s good policy to continue to add additional responsibilities to the Charter Schools Review Board.”

– T. Keung Hui

Correction: The June 5 newsletter should have said Sen. Todd Johnson and his wife previously explored adoption in 2012 but are not doing so currently. Johnson was discussing a birth

certificate bill at the time, which would allow local registers of deeds to print birth certificates.

https://www.newsobserver.com/news/politics-government/article308512360.html

COLOR CODE:

General item, but important. Gets at main point of article= YELLOW

Has a dollar amount or number = GREEN

A specific topic that seems to be different than other topics = BLUE

STATE NEWS – N.C. Medicaid pilot gets $30M approved by state Senate; bill now goes to House

Alternative Headline: NC Medicaid Pilot Needs Funding

[MM Curator Summary]: North Carolina’s Medicaid pilot program, helping thousands with non-medical services, may end if $30 million in funding isn’t approved by July 1.

=====

A North Carolina pilot program focused on creating a better quality of life for Medicaid recipients could receive the funding it needs to continue.

This program is called the Healthy Opportunities Pilot. State senators approved $30 million in stopgap funding for the program, as part of a greater bill for a continuation of funds for many measures, to keep it operational. The state House must now take up the bill.

What You Need To Know

36,442 people have received services through the N.C. Healthy Opportunities Pilot

The goal of the pilot is to reduce hospital stays and ER visits along with financial stress on members; there are more than 100 partner organizations across the state

The North Carolina Department of Health and Human Services previously reported the program would end by July 1 if more money cannot be secured

The measure, commonly known as HOP, is an innovative approach to health care that “buys health” for members of the program, according to the North Carolina Department of Health and Human Services.

The pilot administrators, called Network Leads, are spread out across the state, with two in the east and another in the west. Underneath Network Leads are the Home Service Organizations.

It is through those organizations that these services flow.

The program is designed to offer members a variety of services, including farm fresh food, home repairs, rides to appointments, even safety from interpersonal violence.

One beneficiary in Winterville said her life would be upside down without the program.

“It’s not fast food. It’s not McDonald’s. It’s not Wendy’s. It’s not Taco Bell,” Evette said.

For confidentiality, Evette asked not to disclose her last name.

She has two children who receive Medicaid, which qualified her family for the Healthy Opportunities Pilot.

The mother has received a food box packed with fresh fruits and vegetables every week.

“This program really does help,” she said.

The program took off in 2022 with federal support.

A waiver gave North Carolina the freedom to use $650 million in Medicaid funding to pay for non-medical services with the goal of lowering stress over money.

The concept is to improve a person’s health by increasing access to community resources without billing Medicaid for expensive medical treatments.

Evette said she had a rough time getting by before she joined the program last fall.

“I was struggling paycheck to paycheck,” she said.

It’s a struggle she worried will return.

If more money is not added for the program to the budget by this fall, Deputy Secretary for N.C. Medicaid Jay Ludlam said that would be a death sentence.

“Without the General Assembly appropriating that, for now, we will have to stop the program,” Ludlam said.

Previously, the state health agency warned of the abrupt stop in operations across the constellation of providers by July 1.

Partners like the Catholic Charities of the Diocese of Raleigh in Greenville, sign up as Home Service Organizations. Catholic Charities delivers food boxes to members like Evette.

The Catholic Charities fall under Access East, a network lead that covers services for Beaufort, Bertie, Chowan, Edgecombe, Halifax, Hertford, Martin, Northampton and Pitt counties.

The Community Care of the Lower Cape Fear has 41 Home Service Organizations in its coverage area.

Sarah Ridout is the program director for the Cape Fear Healthy Opportunities Pilot.

“We are seeing a reduction in emergency department utilizations as well as a reduction in hospital admissions,” Ridout said.

That was one of the goals when the program was created.

An Asheville-based nonprofit, Impact Health, is also part of the Healthy Opportunities Pilot as a network lead.

Laurie Stradley is the program director of Impact Health who said the Healthy Opportunities Pilot funding made it easier to quickly provide healthy meals to families in need after Hurricane Helene.

“It was just click, click, click and it was just incredible to see that come together,” Stradley said.

Since the expansion of the Healthy Opportunities Pilot, community partners have hired more employees. Kevion Dixon is one of them at Catholic Charities.

“I love people. I love helping people,” Dixon said. Dixon is the food delivery program manager for the organization. “(I love) getting up every day, being driven to just help those around me. That’s why I wanted to be here.”

The community partner houses sliced carrots, oatmeal, bagged goods, seasonal crops and cultural ingredients for dishes like tortilla wraps.

After a box is packed for a member, Dixon or one of his employees will drive nutritious food to hungry families from as north as the Virginia state line to deep in rural eastern North Carolina.

“They’re just looking to make it day-to-day,” Dixon said.

The funding debate is based on the return on investment.

A Centers for Medicare and Medicaid analysis found cost savings of about $85 a year for each person in the program from mid-March 2022 to the end of November 2023. The savings roughly equate to a little more than $1,000 a year for each person. At the time this federal report was released to the public, 11,809 people had received services.

For Evette, it’s make or break.

“Oh, I would say I’m saving, like, at least $200 a month. When the program leaves, I’m going to be back to crunching the numbers,” Evette said.

An evaluation of the program last year also found that it decreased ER visits and hospital stays by a small margin.

https://spectrumlocalnews.com/nc/charlotte/news/2025/06/24/bill-to-fund-nc-medicaid-pilot-goes-to-house