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 July 24, 2025.

STATE 

The North Carolina legislature adjourned without a budget and is not in session through the end of July. The fiscal year for North Carolina ended on June 30, 2025, so we are operating under a continuing resolution, which means the current FY2024-2025 budget “rolls over” into the new fiscal year FY2025-2026.  

The legislature will convene for very short sessions over the next few months. These sessions may include overrides of bills the Governor has vetoed, bills related to appointments or confirmations, and simple resolutions.   

Dates:
• July 29, 202, to July 31, 2025
• 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. 

Committees or subcommittees may meet during the break between sessions.  

Some 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 IDD 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. 

FEDERAL UPDATE

Reconciliation: On July 4, President Trump signed the reconciliation bill (H.R.1) into law. This bill enacts the largest cuts to Medicaid in U.S. history. The Congressional Budget Office estimates that at least 16 million Americans will lose their health coverage because of this bill. Below are a few of the sections which may affect people with IDD.  

SEC. 71107: Eligibility Redeterminations: Beginning January 1, 2027, States must perform eligibility redeterminations every 6 months—instead of the currently required annual redeterminations—for individuals enrolled in the Affordable Care Act (ACA) Medicaid expansion. While this provision is intended to focus on the ACA expansion population, complex eligibility criteria results in people with disabilities who receive home care services being enrolled in the expansion group. Direct care workers will be impacted by this provision given that nearly a third are enrolled in Medicaid. This requirement puts additional work on the already overwhelmed NC county Department of Social Services and other state agencies.  

SEC. 71115: Provider Taxes: Though provider taxes are not generally utilized in HCBS space, the broader implications of provider tax restrictions will place serious pressure on overall state budgets, likely leading to states having to make difficult changes, including restrictions to eligibility for participants, such as HCBS waiting lists; amount and scope of services covered; and rate restrictions. 

SEC. 71119: Requirement for States to Establish Medicaid Community Engagement Requirements for Certain Individuals: The Community Engagement Requirements, also known as Work Requirements, are the most significant policy within the legislation. It requires people to perform at least 80 hours of Community Engagement during a covered month. 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. This will put additional pressure on our state Medicaid system.  

SEC. 71120: Modifying Cost Sharing Requirements for Certain Expansion Individuals Under the Medicaid Program: Beginning October 1, 2028, this section requires states to impose cost sharing/co-pays on services delivered to individuals enrolled in the ACA expansion population with incomes above 100% of the federal poverty level. The cost-sharing amounts must be greater than $0 but no more than $35. While the number of people with IDD directly impacted by this provision may be limited, these types of requirements for uncollectible co-pays result in a rate reduction for providers.  

SEC. 71121: Making Certain Adjustments to Coverage of Home or Community-Based Services Under Medicaid: This section allows states to create a new 1915(c) waiver, beginning July 1, 2028, that serves individuals who do not meet the institutional level of care typically required for these waivers. The clinical eligibility for these waivers uses a needs-based criteria similar to the eligibility requirements for 1915(i) State plan HCBS. Overall, this appears to be a positive provision that provides states with enhanced flexibility to serve individuals at lower levels of care.  

Overall, over the next few years, this bill will force states to make challenging decisions. Without additional state funding, Medicaid spending will have to be reduced to account for the loss of Federal matching funds. This leads to the possibility of changes to eligibility, reduction in rates, elimination of some optional services, and other reductions.  Advocacy on the state level will be important to protect access to home and community-based services (HCBS) and other optional services. 

Fiscal Year 2026 Budget: While the focus has rightly been on the Reconciliation bill (HR 1) recently, Congress still needs to pass a government spending bill for the 2026 fiscal year. With government funding set to expire on September 30th, the appropriations committees in Congress are working to finalize government spending levels for the coming fiscal year. 

As a reminder, the President’s FY 2026 budget proposal recommends eliminating discretionary funding for the University Centers for Excellence in Developmental Disabilities (UCEDDs) and consolidating UCEDD activities under the Independent Living program, alongside four other distinct national disability programs. This would dismantle a trusted, longstanding network that provides critical research, training, and services to individuals with developmental disabilities and their families in every state, including North Carolina.  

The House Appropriations Committee’s Labor, Health and Human Services, and Education (LHHS) subcommittee has jurisdiction over funding for AUCD Network programs and other funding related to IDD. While some committees have completed their markups, Representative Robert Aderholt (R-AL), Chairman of the LHHS subcommittee, says he expects the funding bill will be marked up during the first week of September.   

Members of Congress need to hear how important UCEDDs are in supporting people with disabilities to live, learn, work, and be a part of their communities.      

Other Federal Actions 

Subminimum Wage: The Department of Labor (DOL) has announced the withdrawal of its proposed rule to phase out 14c (subminimum wage) programs for workers with disabilities. The proposed Employment of Workers With Disabilities Under Section 14(c) of the Fair Labor Standards Act rule was published in December of 2024. With this most recent action, the Department is formally discontinuing the rulemaking process and removing that proposal from further consideration.  

Department of Education: Elimination of positions at federal level continues. The Supreme Court ruled that the Trump Administration can carry out plans to dismantle the Department of Education including firing nearly 1400 employees. The Department enforces protections for students with disabilities and houses the Office of Special Education Programs (OSEP). OSEP distributes funds from the Individuals with Disabilities Education Act (IDEA) as approved by Congress, funds essential programs to inform parents and train teachers, monitors states to make sure they’re complying with IDEA and enforces consequences for noncompliance, and more. Eight million children in the U.S. are now served under IDEA. Students with disabilities, families, and educators will all likely be affected by these changes.    

And there has been a freezing of federal dollars. The Trump administration announced an unprecedented nationwide halt on $6.8 billion in education funding Congress allocated in March.