Public Policy Update - February 23, 2026

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 February 23, 2026.

FEDERAL

Budget

On January 22, 2026, the House passed the remaining six appropriation bills, including Labor, Health and Human Services, and Education, Defense, Transportation and Housing and Urban Development, Financial Services and General Government, State and Foreign Operations, and Homeland Security. This package of six bills was sent to the Senate for their approval. On January 30, 2026, the Senate passed all but Homeland Security, which was removed to allow for additional negotiation in the wake of the shootings by ICE in Minneapolis.

Since the package changed, it was sent back to the House, which passed the package of five bills on February 3, 2026. Below are key parts of the new budget that affect people with disabilities.

Health and Human Services

• Administration for Community Living (ACL): $2.5 billion
  
  • UCEDDs: level funded at $43,119,000
• Health Resources and Services Administration (HRSA): $8.9 billion, an increase of $929 million above FY2025
  
  • LENDs: not specifically cited, but Autism and Other Developmental Disabilities (which includes LENDs) has a $1 million increase to $57,344,000, so we can assume LENDs are level funded
• State Councils on Developmental Disabilities: level funded at $81,000,000
• Protection & Advocacy: level funded at $45,000,000
• National Institutes of Health (NIH): $48,716,000,000, an increase from FY25 and from the President’s budget
• Voting Access for Individuals with Disabilities: $10,000,000
• Center for Medicaid and Medicare Services program management – level funded $3.7 billion

Rejects the Administration's proposal to consolidate the Administration for Children and Families and the Administration for Community Living.

Education

• Individuals with Disabilities Education Act (IDEA) funding was increased by $20,000,000
  
  • Grants to states (Part B): $14,233,704,000
  • IDEA Part C: $540,000,000
• Head Start: $12,356,820, an increase of $85 million from 2025
• Transition and Postsecondary Programs for Students with Intellectual Disabilities (TPSIDs): $13,800,000

Bill highlights that Congress has not provided the authority to the Education Department to transfer its responsibilities to other agencies.

Interagency Autism Coordinating Committee (IACC)

The Department of Health and Human Services appointed 21 new members. There is some concern from advocates that many of the new appointees support unproven causes and treatments of autism. In addition, the number of self-advocates on the committee has been reduced from 7 to 3. The Autism Science Foundation released a statement on the new IACC membership in which they say that this new membership “does not reflect the breadth of the autism community” and “disproportionately represents a very small subset of families who believe vaccines cause autism, while excluding the overwhelming majority of autistic individuals, families, and advocates who support evidence-based science.”

Food and Drug Administration (FDA)

The FDA removed a webpage titled “Be Aware of Potentially Dangerous Products and Therapies that Claim to Treat Autism” from its website (link goes to archived page). Previously, the page warned about practices like chelation therapy and hyperbaric oxygen therapy, which are often marketed towards parents and family members of autistic children as potential cures or treatments for autism. The FDA page included quick tips to help people identify false or misleading claims about treatments or products that could potentially cause harm to autistic individuals

Lawsuit Regarding Section 504

On January 23, nine states renewed a lawsuit against Section 504 of the Rehabilitation Act and the integration mandate. Under Section 504, the integration mandate ensures that people with disabilities can receive services in the community instead of institutions. The nine states are challenging a Department of Health and Human Services (HHS) rule about the integration mandate, which says that any entity receiving funding from HHS needs to serve people with disabilities in the most integrated setting appropriate. The nine states say that this rule is unlawful and unconstitutional.

This lawsuit is a revised version of an earlier case, in which 17 states argued that Section 504, as a whole, is unconstitutional. The states later withdrew their claim after advocacy from the disability community. Now, Alaska, Florida, Indiana, Kansas, Louisiana, Missouri, Montana, South Dakota, and Texas are renewing the lawsuit

If successful, it would be harder for disabled people to enforce their right to live and participate in the community.

STATE

Budget

North Carolina is the only state in the U.S. without an enacted budget for the 2025-2027 biennium. State operations continue under previous funding levels. It is not expected that the budget will be addressed until the General Assembly returns for the short session in April 2026.

There are impacts of not having a budget on several areas, including teachers' raises and state employees' raises. The area that has been on advocates' radar is the shortfall in the Medicaid rebase. The Department of Health and Human Services enacted Medicaid rate cuts back in October as a result of the shortfall. The cuts were in response to the General Assembly allocating dollars that are projected to fund Medicaid only through April 2026. Then, during the second week of December, Governor Stein announced that the Medicaid cuts to providers that were put in place on October 1, 2025, were ending. The cuts were reversed following successful legal challenges.

So the shortfall remains, and the responsibility now falls back to the General Assembly to provide a long-term financial solution for Medicaid. Legislative leadership has suggested that they will monitor the Medicaid situation in the time leading up to when they return.

PHP (Prepaid Health Plans) H.R.1 Program Workgroup

A workgroup has been convened, which includes a Division of Health Benefits team and representatives from the Health Plans in North Carolina. The workgroup is developing plans to address the requirements from HR 1, which are designed to reduce Medicaid spending. Some of the first initial areas to be addressed are below.

(Sec. 71109) “Qualified Alien” Medicaid Eligibility. This section has to be enacted by October 1, 2026. Beneficiaries with an immigration status that is no longer eligible will be disenrolled from Medicaid. This will result in loss of funding for previously eligible populations, including most refugees, asylees, victims of human trafficking, abused spouses and children, DACA (Deferred Action for Childhood Arrivals) recipients, individuals whose deportation is being withheld or who were granted conditional entry, and individuals who received humanitarian parole. Hospitals and providers will not be able to receive federal Medicaid reimbursement for care provided to these populations.

There is also a provision that eliminates the higher Medicaid percentage under ACA for emergency care provided to immigrants who would qualify for Medicaid except for their status. These modifications to FMAP payments will likely lead to lower Medicaid payments to states, requiring them to fund more to maintain current reimbursement levels.

(Sec. 71119) Work/Community Engagement Requirements for Expansion Adults. The state is expected to enact this requirement by January 1, 2027. Beneficiaries ages 19-64 receiving coverage through Medicaid expansion must meet work/community engagement requirements or be granted an exception to maintain coverage.

(Sec. 71107) Eligibility Redeterminations for Certain Individuals. This requirement must be in place by January 1, 2027. Most beneficiaries receiving coverage through Medicaid expansion will have eligibility re-evaluated every 6 months (this is currently every 12 months).

(Sec. 71112) Limits on Retroactive Medicaid / CHIP Coverage. This must in place by January 1, 2027. Beneficiaries who apply for Medicaid may only receive up to 1 month (MXP) or 2 months (all other Medicaid) of retroactive coverage. This is a reduction from 3 months.

These federal requirements place additional administrative burden on North Carolina and, along with other cuts to Medicaid, will create a loss of services over the next several years.