North Carolina lawmakers have approved a temporary spending plan, often referred to as a “mini budget,” which was signed by Governor Josh Stein on August 6, 2025. The plan allocates $600 million to support both the Medicaid rebase and the Medicaid Oversight Fund. However, this amount leaves a funding gap of $319 million for the Medicaid rebase.
The North Carolina Department of Health and Human Services (NCDHHS) has stated that fully funding the Medicaid rebase is necessary to maintain current levels of care across the state. With the shortfall, NCDHHS may need to either reduce optional services or lower provider rates in order to stay within budget.
In response to the situation, NC Health and Human Services Secretary Dev Sangvai released a statement:
“More than three million people in North Carolina depend on Medicaid for comprehensive care that is life-changing and in many cases lifesaving. Underfunding NC Medicaid now after years of building a nationally recognized program that delivers real outcomes for the people we serve is a serious setback. The forced cuts from the budget shortfall threaten care for those who need it most and include some of North Carolina’s most vulnerable populations.
Over time, the combination of underfunding, the loss of key initiatives like the Healthy Opportunities Pilots, and administrative budget shortfalls risks a fundamental erosion of the NC Medicaid program.
Despite these challenges, the mission of the North Carolina Department of Health and Human Services remains unchanged – we will continue to work to improve the health and well-being of all North Carolinians. We will continue the essential work that NCDHHS does every day with determination, compassion, and a focus on the people we serve.”
