An immediate way to alleviate North Carolina’s Medicaid crisis

New data indicates the NC Opportunity Scholarship voucher program is overfunded by about $190 million. 

North Carolina’s Medicaid program is facing a crisis. The NC Department of Health and Human Services has projected a $319 million gap between actual Medicaid costs and the funding appropriated for the 2025-2026 fiscal year. The Department has already informed state lawmakers that without additional funding by October 1, 2025, it would be forced to make cuts to provider reimbursements, which are already too low.  

Yet, the NC General Assembly has still not passed a full budget—and in the last mini-budget they underfunded the NC Medicaid program. Both chambers agree that the state should fund Medicaid and agree on the amount. But instead of working together to pass one clean funding bill to send to the Governor’s desk, they have each passed their own bill, leaving the work unfinished. The resulting lower Medicaid rates could force providers, especially specialists, to limit or even stop taking Medicaid patients all together.   

Both NC chambers have already passed bills that would allocate an additional $190 million for Medicaid and delay provider cuts until January 1, 2026, when the NC General Assembly would reconvene to reevaluate Medicaid funding needs. However, following unfortunate disagreements over taxes and other policies, state legislators adjourned without passing a new budget to sign the agreed-upon $190 million appropriation into law. 

The irony of the situation is there’s $190 million already in the state budget, waiting to be allocated. In August 2025, the NC Justice Center reported that the Opportunity Scholarship voucher program was overfunded by $137 million. This figure was based on the assumption from the State Education Assistance Authority that usage of the program would increase 40 percent from the prior year. 

The latest data shows that voucher usage has increased by just 28 percent, not the projected 40 percent. This implies that the program will be overfunded by $190 million this year, the exact amount needed to shore up Medicaid funding into January.  

If legislators leave this money in the overfunded voucher program, the $190 million will be “carried over” to the next year, when it also likely won’t be needed. While North Carolina’s public schools are historically underfunded and state lawmakers have a responsibility to fully fund schools under the Leandro Plan, right now this $190 million in idle funds could be used to fill the Medicaid funding gap. 

This surplus for school voucher programs isn’t benefiting anyone by sitting unused in state coffers. The NC General Assembly is jeopardizing the health of North Carolinians, particularly those with low and moderate incomes, due to their inability to perform its basic function of passing a comprehensive state budget. They should not permit $190 million to be idle when the funds are desperately needed to ensure provider payments and coverage for Medicaid services. 

State leaders should return to Raleigh immediately to vote to move this $190 million out of the voucher program and allocate it as emergency funds to stabilize the Medicaid program.