N.C. Gov. Josh Stein announces the reversal of Medicaid cuts Dec. 10, 2025. (Photo: Lynn Bonner/NC Newsline)
Two successful lawsuits restoring full Medicaid payments to health providers and more lawsuits in the legal pipeline led to his decision to reverse rate cuts imposed this fall, Democratic Gov. Josh Stein announced Wednesday.
In October, the state Department of Health and Human Services reduced rates for medical services between 3% and 10%, saying the cuts were needed because Republican legislators had not provided enough money to cover increased costs for the entire fiscal year.
Legislative leaders have stepped up their criticism of the cuts in recent weeks, saying they’re unnecessary and accusing Stein of playing politics with health care. Republican budget writers said Medicaid had enough money to last until April without cutting rates.
In the last month, judges in two cases reversed cuts to autism therapy providers and adult care facilities’ personal care services. Three more lawsuits have been filed, Stein said, and more were coming.
“DHHS saw the writing on the wall,” he said. “So the department is restoring all provider rates to where they were before the cuts took place.” Stein did, however, note that the program would run out of money before the end of its fiscal year.
Payments will be restored retroactive to Oct. 1, DHHS Secretary Dev Sangvai said. A spokesman for DHHS told NC Newsline later that coverage of GLP-1 drugs for weight loss would also resume.
More than 3 million North Carolinians use Medicaid as their health insurance. Rural residents are more likely to rely on Medicaid than their urban counterparts.
Health care providers stood behind Stein and Sangvai as they announced the reversal. Several thanked them for restoring rates.
Medicaid pays for 25% of primary care visits, said Dr. Benjamin Simmons, president of the NC Academy of Family Physicians. “Without adequate funding, many practices faced the difficult possibility of closing their doors or laying off staff, jeopardizing care for all North Carolinians,” Simmons said.
Before the press conference started, Tim Rogers, president and CEO of the Association for Home & Hospice Care of North Carolina, stepped away for his spot next to other providers to tell NC Newsline, “We were one day away from launching our lawsuit. This helps.”
After Sangvai announced the rate cuts in August, Republicans tried but failed to provide the health insurance program with more money. House and Senate leaders deadlocked over spending provisions unrelated to Medicaid funding that Senate leaders included in their proposal.
In November, Republican leaders rejected Stein’s call for a special session to increase Medicaid funding.
At Wednesday’s event, Stein once again criticized Republicans for failing to fully fund Medicaid or pass a comprehensive state budget. “Legislators have said over and over that they will fund Medicaid,” Stein said. “It’s time to stop talking about funding Medicaid. It’s time to start fund Medicaid. It’s not about politics. It’s about people’s lives.”
Sen. Jim Burgin (R-Harnett), a key Senate health budget writer, was in the audience for the announcement. He said he was disappointed in Stein’s tone and his laying blame on Republican legislators.
“I would rather work with people than attack people,” Burgin said.
The state has faced similar issues with Medicaid funding in past years, Burgin said, and it’s always been resolved.
“The rate cuts were an overreaction,” Burgin said. “People lost their jobs because of rate cuts” he said, and they put providers through anguish.
In a statement, House Republicans slammed the cuts as “disastrous and unnecessary,” casting doubt on the likelihood that the Medicaid program would in fact run out of money, but pledging to quickly provide more funds if it does.
“Gov. Stein manufactured a crisis out of thin air, and regular North Carolinians paid the price for it,” said Rep. Larry Potts, R-Davidson, one of the House’s top DHHS budget writers. “I’m glad he’s finally cleaning up his mess, but it should’ve never gotten this far. People deserve steady leadership, not political games.”
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