It is budget season in Raleigh!

The North Carolina House of Representatives recently released their budget, and the Senate released their version of the budget last week. Now, the two chambers will convene a conference committee to hash out the differences and send a budget to Governor Cooper. In this piece, I will highlight several of the Senate budget provisions related to health care.


State funding for the Medicaid program would rise to $3.92 billion in Fiscal Year (FY) 2019-20 and $4.13 billion FY 2020-21.  There would be a Medicaid rebase appropriation of $37.3 million for FY 2019-20 and $203.6 million for FY 2020-21. Medicaid rebase is the increase in spending to cover the projected increase in enrollment, utilization, prices, and other factors.

Medicaid expansion has been one of the most quarrelsome issues during this legislative session. Despite Gov. Cooper’s threat of an automatic veto of any budget that does not include appropriations for expanding the state’s program for certain low-income individuals, neither the Senate nor the House has included funding for it. The governor, Senate and House Democrats, and a small group of House Republicans each have introduced proposals to expand Medicaid. The proposals share fundamental problems that are very likely to lead to budget instability. The proposals are unlikely to lower costs for the private insurance markets, and they even may raise them. The House and Senate would be wise to keep any Medicaid expansion proposal out of the budget and instead focus on proposals that embrace market-oriented policies to address root causes of high health care costs.

Certificate of Need

The Senate budget includes provisions to amend the state’s archaic Certificate of Need (CON) laws. In brief, CON laws require a permission slip from a state planning board to build or expand health care facilities. The Senate budget includes a section borrowing language from Senate Bill 646 that would remove several facilities from the requirement, including ambulatory surgery centers, diagnostic centers, kidney disease treatment centers, chemical dependency treatment facilities, psychiatric hospitals, among others. Readers of the John Locke Foundation’s research updates know the negative impact these laws can have. CON laws allow politically powerful insiders to make decisions about the supply of health care in a given community, while also artificially raising prices and limiting supply. This section of the budget will be a significant step toward devolving power from government bureaucrats to patients and allow the private market to meet the demand of North Carolinians.

Innovation Waiver Slots

Under the North Carolina Medicaid Program, known as the Innovation Waiver, there is an opportunity for individuals with intellectual or development disabilities to receive the care they need in their home or community setting, rather than an institutional setting. Currently, there are as many as 12,000 individuals on the waiting list to receive a waiver for home care. The Senate budget would appropriate $32.6 million over the biennium for an additional 1,000 waiver slots for this program.

Mental Health Funding

The Senate budget would appropriate $35.4 million in recurring funds for an additional 100 school psychologist positions. This move would help to address the troubling trend of increased rates of mental health issues among children and young adults. Also, to assist with mental health issues in our schools, the Senate budget would provide $10 million in recurring funds for a mental health support grant for public schools to employ, contract with, and train mental health professionals and additional health support services.

Opioid Funding

Amid an ongoing national opioid crisis that claims 130 lives a day in overdoses, the Senate has allocated additional funding for addressing this opioid crisis in North Carolina. An additional $10 million would be appropriated over the biennium to be used for substance abuse services for treatment and recovery options and to prevent and reduce prescription opioid misuse. Also, the budget would allocate $75,000 for drug overdose reversal medication to the North Carolina Harm Reduction Coalition, an organization that focuses on reducing health consequences that arise from drug use, sex work, and high-risk activities. Similarly, $25,000 would be allocated to North Carolina law enforcement agencies for the same medication.


Lastly, the Senate budget includes a Telehealth Pilot Program. Telehealth, sometimes referred to as telemedicine, is an innovative, growing method for patients to receive different forms of care from the provider at a distance through telecommunications. In particular, this technology can help address the physician care shortage by connecting patients virtually to the nearest provider and specialist in the state or eventually anywhere in the country. The pilot program would appropriate $500,000 in FY 2019-20 for the purchase of telehealth or telemedicine infrastructure and equipment for Robeson, Bladen, and Columbus counties in southeast North Carolina.