What North Carolina’s state budget debate means for Medicaid
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
WHAT ELSE WE’RE WORKING ON
- Back to Saturday’s protests. Anna Roman explains what “No Kings Day” will look like in the Triangle. The string of nationwide protests is scheduled Saturday on President Donald Trump’s 79th birthday and while D.C. celebrates the 250th anniversary of the U.S. Army.
- The Rev. William Barber II, a nationally known civil rights activist from North Carolina, has faced recent arrests for protesting legislation. Luciana Perez Uribe Guinassi reports the anti-poverty advocate has challenged proposed cuts to Medicaid and food assistance programs, like SNAP.
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.
Today’s newsletter was by Sophia Bailly, T. Keung Hui and Luciana Perez Uribe Guinassi. Check your inbox Sunday for more #ncpol.
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This story was originally published June 13, 2025 at 5:00 AM.
