Gov. Josh Stein is facing sharp criticism for refusing to move his Oct. 1 deadline to fully fund North Carolina’s Medicaid rebase, even though House Speaker Destin Hall, R-Caldwell, says the program has enough money to last into early next year and that Stein and the Department of Health and Human Services have administrative tools to address the gap.
According to Stein, there will be cuts to Medicaid reimbursement rates starting today if no additional funding is received or the date is not pushed forward, potentially leading to healthcare providers laying off staff and people losing access to healthcare.
Hall and the chamber’s Health Appropriations chairs issued a press release, calling the governor’s actions a “political stunt that jeopardizes North Carolinians’ access to health care.”
“Governor Stein’s arbitrary Medicaid cuts are unjustifiable, clearly intended to manufacture a crisis,” Hall said in the press release. “The legislature has given funds to sustain Medicaid well into 2026. This breathtakingly cynical move ignores years of precedent where the rebase has been supplemented even later in the fiscal year.”
On Sept. 23, the House voted 111-0 in favor of passing a House committee substitute bill to SB 403, “Additional Medicaid Funds and Requirements,” that fully funds the Medicaid rebase.
The Senate passed its version of the bill on Sept. 22 after it was discussed in the Senate’s Appropriations/Base Budget Committee.
Rep. Grant Campbell, R-Cabarrus, who is also a physician, told the House last week that the Medicaid rebase has been increasing at a fiscally unsustainable rate for several years, with double-digit percentage growth becoming a regular occurrence.
“The proposed cuts are severe, anywhere from 3 to 10% for things like hospital stays, primary care, dental care, behavioral health. And I could go on and on,” Campbell said. “There are health care providers all over the state that are already planning layoffs, and some are trying to decide whether to even continue seeing Medicaid patients at all.”
The governor reiterated much of what he said in a press conference last week to reporters after Tuesday’s Council of State meeting, including that the legislature hasn’t given enough money for what is needed in the program and the need for a “clean Medicaid bill.”
“I understand that there are real disputes between the House and the Senate on a lot of issues, whether it’s the tax policy, or whether it’s what we’re paying teachers, or whether we have this Children’s Hospital,” Stein, a Democrat, said. “All of those are really important issues, and frankly, it’s a shame they have not come to a budget agreement. We’re one of only two or three states in the country that doesn’t have a budget to operate our government, but those issues are not relevant to this question of Medicaid.”
During Friday’s press conference, he said that NCDHHS determined that $319 million is needed to fully fund the Medicaid rebase, even though both the House and the Senate agreed only $190 million would be needed in their separate bills, based on analysis by the General Assembly’s Fiscal Research Division.
The governor said another option would be to use some of the $500 million in the Medicaid Contingency Reserve that is available for the legislature to appropriate.
Four truths about the Medicaid and NC budget process:
— Rep. Erin Paré (@ErinforNC) September 29, 2025
1. The Governor does not have to cut Medicaid reimbursement rates on October 1, but it sounds like he is going to put politics before the people and do it anyway;
Hall and the House’s Health Appropriations chairs stated that other options include redirecting lapsed salary funding from NCDHHS and other agencies or utilizing $18 million through an intergovernmental transfer involving Local Management Entity/Managed Care Organizations (LME/MCOs).
They added that lawmakers invested $600 million to sustain the program into 2026, and the House overwhelmingly passed another $192 million in Senate Bill 403 last week to fund the Medicaid rebase.
“Last year, the legislature approved $377 million for the Medicaid rebase in November 2024, clear proof that Stein’s October 1st deadline is unfounded,” the release said. Lawmakers will deliver additional Medicaid funding when necessary, but will not be forced into rubber-stamping Gov. Stein’s unproven rebase number.”
As in Friday’s press conference, Stein told reporters on Tuesday that if they extend the deadline, they will have fewer months to make up the difference.
“We’ve already pushed it from July 1…August 1, and we then pushed it to October 1, so we are now already three months into the fiscal year, so they don’t give us the $300 million we need to fund the program,” he said. “We only have nine months to find those savings. If we keep pushing it off, then we only have eight months, or seven months, or six months. We cannot keep pushing these cuts off. What they need to do is give us the money that they know we need, so we can continue to provide these vital services to people who need them.”
“Gov. Stein is the only person threatening cuts today,” Health Appropriations Co-Chair Rep. Larry Potts, R-Davidson, said in the release. “It’s a callous political move, not a fiscal necessity, and North Carolina families will suffer because of it.”