Public Policy Update - August 25, 2025
Read a summary of recent public policy updates that may be of interest to North Carolinians with intellectual and other developmental disabilities (I/DD). These updates are current as of August 25, 2025.
State
Legislative and Policy
The North Carolina legislature adjourned without a budget earlier this year but reconvened in late July and passed a âmini-budgetâ. As expected, there was no funding for Innovations or Traumatic Brain Injury waiver slots, and no direct support professional (DSP) wage increases. It also included:
- Cuts to crisis beds across the state
- No funding for Health Opportunities Program
- $600 million for Medicaid Rebase and Medicaid Oversight Fund â this is $319 million less than what the Department of Health and Human Resources (DHHS) determined was needed for Medicaid rebase. (Medicaid Rebase is funding needed to maintain current Medicaid services for the upcoming year.)
In response to the shortfall for Medicaid Rebase, an announcement came out on August 11, 2025 from DHHS Secretary Sangvai indicated the following cuts:
- Rate reductions of 3% across all providers, including for the Innovations Waiver
- Rate reductions of 8% for ICFs
- Rate reduction of 10% for inpatient, PRTFs, RB-BHT (intervention for autism)
- Elimination of certain services altogether â GLP-1 treatment for obesity
The legislature will continue to convene for very short sessions over the next few months:
- August 26, 2025, to August 28, 2025
- September 23, 2025, to September 25, 2025
- October 7, 2025
- October 28, 2025, to October 30, 2025
- November 5, 2025, with no adjournment date.
Your voice is needed to let decision-makers know the impact of rate cuts on the ability to hire and pay DSPs a fair wage, and to support people with intellectual or developmental disabilities (I/DD) in their communities.
Bills that passed before adjournment and signed into law
HB1012: Disaster Recovery Act of 2025 (SL2025-26)
This bill provides additional money and extends some regulatory flexibilities for communities impacted by Hurricane Helene and wildfires.
HB 67 (Healthcare Workforce Reforms.)
This legislation enacts comprehensive healthcare workforce reforms in North Carolina. Of specific interest to the I/DD community, this bill expands the qualifications for Associate Professional and Qualified Professional to include community college graduates with associate degrees in human services fields and appropriate experience.
New Resource â Disability Benefits 101 (DB101)
The North Carolina Department of Health and Human Services launched a resource to help people with disabilities in the workforce. The goal is to simplify how to apply for, access and understand public benefits. The website provides guidance on navigating programs such as social security disability insurance, food and nutrition services and Medicaid. For more information: https://nc.db101.org
Federal Update
Reconciliation
In the July edition of NCCDDâs Highlight and Hot Topics, the effects of the reconciliation bill (H.R.1), which was signed into law on July 4, 2025, were highlighted. This bill enacts the largest cuts to Medicaid in U.S. history. Key provisions of concern include:
- Increased frequency of Medicaid eligibility redeterminations which will put additional work on already overwhelmed NC county Department of Social Services and other state agencies. (Jan 2027).
- Limitations of provider taxes which place pressure of overall state budgets which could lead to rate cuts and reduction in services that are covered.
- Community Engagement Requirements (Work Requirements) which adds administrative burden and pressure on the Medicaid system. While people with disabilities are exempt from this requirement, the administrative burden will fall on individuals, as well as local and state agencies, to prove exemption or completion of the 80 hours.
- Cost Sharing (co-pays) for certain services. While the number of people with IDD directly impacted by this provision, these types of requirements for co-pays which cannot be collected, result in a rate reduction for providers.
Advocacy on the state level will be important to protect access to home and community-based services (HCBS) and other optional services.
Federal Budget and Appropriations Process
FY26 appropriations are different from H.R.1, or the One Big, Beautiful Bill Act. H.R.1 was passed into law using the budget reconciliation process in July.
With government funding set to expire on September 30, 2025, the appropriations committees in Congress are working to finalize government spending levels for the coming fiscal year.
Senate has begun work on FY26 appropriations. Three appropriations bills have been approved â including Labor, Health and Human Services, Education, and Related Agencies which is where many programs related to I/DD are funded. This bill did not include the cuts to UCEDDS suggested by the Administration/Presidentâs budget.
The process for FY 2026 budget is still in progress, with the Senate considering additional measures and amendments. Appropriation bills must still be passed by both the House and the Senate and signed into law by the President. There will be ongoing negotiations and potential disagreements between branches of government about the budget.
Your voice is important in the on-going budget process!