North Carolina’s $319 Million Medicaid Crisis Puts Millions at Risk

North Carolina Medicaid cuts 2025 as funding crisis threatens health care for millions

North Carolina’s Medicaid program is in trouble. Lawmakers didn’t give enough money to cover the state’s health care costs, leaving a $319 million gap. Because of that, the Department of Health and Human Services (DHHS) had to start cutting payments to doctors and hospitals on October 1, 2025.

These cuts affect more than 3.1 million people who rely on Medicaid for health care. Many of them are low-income families, seniors, and people with disabilities.

The problem started when the General Assembly, which is controlled by Republicans, only gave $500 million of the $819 million needed for Medicaid’s yearly budget update. This update, called a rebase, helps cover the cost of things like more patients, higher medical prices, and new rules. DHHS warned that without the full amount, they would need to make “painful cuts.”

Now those cuts are real. Medicaid payments have been reduced by 3% to 8% for most doctors and clinics. Hospitals, nursing homes, and mental health centers face even bigger cuts — some up to 10%. DHHS also cut Medical Home Fees by 97% and stopped paying for some services completely.

This hits rural hospitals and small clinics the hardest. Many are already struggling to stay open. Some doctors may soon stop taking Medicaid patients because they can’t afford it.

Real people are already being hurt:

  • Job Gilliam, a 49-year-old from Catawba County, has multiple sclerosis and needs home care through Medicaid. He often misses care visits because his aides keep quitting. In six years, he’s had 25 different caregivers, most leaving because of low pay — about $16 an hour.
  • Chelsea Gray, whose 14-year-old daughter Molly has severe epilepsy, fears her doctors will stop accepting Medicaid. She already waits months for appointments, and the cuts will make it worse.

Doctors say these changes mean longer waits, delayed care, and worse health outcomes, especially for rural families.

The House and Senate are blaming each other. Both passed different Medicaid funding bills, but neither would vote on the other’s version. The Senate wants to include money for a new children’s hospital in Apex, but the House says the project isn’t needed because other children’s hospitals already exist. Now both sides are stuck until they meet again on October 20.

Governor Josh Stein, a Democrat, says lawmakers “failed the people of North Carolina” and are putting “politics over people.” But House Speaker Destin Hall, a Republican, says it’s a “manufactured crisis” and that Stein could have used other funds to stop the cuts. Stein disagrees, saying only lawmakers can approve that money.

Hospitals warn that the cuts could get even worse. The North Carolina Healthcare Association says when the state cuts are combined with federal funding changes, the total loss will be even larger. Some hospitals may have to reduce services or stop seeing Medicaid patients altogether.

The timing couldn’t be worse. The federal government shutdown and new national Medicaid rules are adding more pressure. Under President Trump’s “One Big Beautiful Bill Act,” new work rules will start in 2027. The plan also cuts federal health care taxes, which North Carolina uses to pay for its share of Medicaid.

Experts say this could cost the state $23 billion in federal Medicaid money over the next 10 years and cause 900,000 people to lose coverage.

North Carolina only expanded Medicaid in December 2023, bringing coverage to 680,000 new people. Now, many of them could lose that care if the crisis continues.

Medicaid helps one in every four North Carolinians, but without a deal in the legislature, the program could run out of money again soon. Doctors and patients say the cuts are already making life harder — and if lawmakers don’t act fast, the damage could last for years.

As one doctor said, “If these cuts stay, our health care system will break from the bottom up.

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