Key Health Provisions in the North Carolina State Budget

Blog | December 3, 2021

By Michelle Ries

On November 18, Governor Cooper signed the 2021 Appropriations Act (Session Law 2021-180) into law. This state budget, negotiated for months by members of the North Carolina General Assembly and Governor Cooper, and with input from countless experts, advocates, and state stakeholders, outlines $25.9 billion in spending for North Carolina for the next year.

In this post, we outline key health-related provisions in the new budget and provide additional resources for further information.

Full text of the 2021 Appropriations Act available here:


Continue Medicaid Coverage for New Mothers: Extends Medicaid benefits for low-income mothers for one year after a child is born. Appropriates $62.8 million through 2023, paid from additional hospital assessment receipts

Medicaid Expansion Study: Joint House and Senate committee to study and propose legislation on “Access to Healthcare and Medicaid Expansion” to next legislative session

Medicaid Coverage for Parents of Foster Kids: Maintains parents’ Medicaid coverage for continuity of care

Medicaid Reimbursement Contract for Residential Schools: Requires the Department of Public Instruction to enter into a contract with a third-party entity for any administrative services necessary to receive maximum reimbursement for medically necessary health care services for which payment is available under the NC Medicaid Program provided to eligible students attending the Governor Morehead School for the Blind, the Eastern North Carolina School for the Deaf, and the North Carolina School for the Deaf


Health Care Workforce

Direct Care Worker Wage Increase (to $15/hr):

  • $1,500 one-time bonus for eligible Direct Care Workers
  • Workers for home and community-based services (HCBS)
  • Workers in Intermediate Care Facilities for Individuals with Intellectual Disabilities (ICF/IIDs)

Private Duty Nursing Wage Increase (to $45/hr)


Local Public Health and Health Care Safety Net

Provides $15 million in funding to the NC Association of Free & Charitable Clinics to support operations of member clinics statewide

Provides $36 million to local health departments to backfill prior spending and allow for more services, particularly related to the COVID pandemic


Rural Health and Infrastructure

Provides $4.9 million for small rural hospital improvements

Provides $4 million for the Rural Health Loan Assistance Repayment Program to support loan repayment for MDs, PAs DDSs, NPs, and CNWs recruited to rural areas of North Carolina

Provides $8.025 million in one-time funding for 10 community and rural health organizations

Provides $1 billion in one-time funds for expansion of broadband access in rural areas

Provides $90 million in one-time ARP funds to issue-targeted grants addressing local infrastructure needs and connecting underserved households.



Provides $10 million to the Virtual Behavioral Health Services Grant Program to support the NC Department of Health & Human Services (NC DHHS) Office of Rural Health (ORH) for Directed Grants in expanding patient access to hospital-based virtual telepsychiatry services from non-hospital settings (home, primary care office, etc.)

Provides $1 million in funding for school-based virtual health services: Funding to Atrium Health for 10-site pilot program in Anson County and Winston-Salem elementary classrooms

Provides $1.5 million for NC Statewide Telepsychiatry Program (NC-STeP) to provide psychiatric assessments and consultations via telemedicine


Non-Profits and Human Services

Provides $20 million in new funding for SmartStarts

Provides $40 million in new ARP funding for food banks

Provides $7.5 million in one-time funding and $500,000 per year in new recurring funding for domestic violence agencies

Provides $1.5 million per year in new recurring funding ($3 million over two years) to Nurse-Family Partnership

Provides $7.5 million in one-time funding and $500,000 per year in new recurring funding for sexual assault agencies

Provides $8.8 million in one-time funding for grants to nonprofits providing services to survivors of human trafficking

Provides $2 million in one-time funding to Habitat for Humanity for the production of affordable housing

Provides $11.4 million in one-time funding to YMCAs

Provides $51 million in one-time funding to help nonprofit private colleges and universities offset the effects of the COVID-19 pandemic, and $2.2 million per year in new funding for scholarships to private colleges and universities

Provides $5 million in one-time funding to the NC Rural Center for capacity-building grants for community development financial institutions (CDFIs)

Provides $29.25 million in one-time funding for trails, much of which will be distributed as grants to nonprofits


Additional COVID Relief

Uses $500 million in ARP funds to provide grants to businesses in the entertainment and hospitality industries that had a 20% economic loss

Provides more than $102 million in one-time ARP funding for statewide COVID-19 vaccination efforts



Establishes the Home and Community-Based Services Fund: as a non-reverting special fund in the Division of Health Benefits (NC DHHS), using savings received by DHB as a result of federal receipts from the enhanced federal medical assistance percentage for home and community-based services available to the State under the American Rescue Plan Act of 2021.

Establishes the Opioid Abatement Reserve in the General Fund to maintain funds received by the state as a beneficiary of the final consent judgment resolving the lawsuit against McKinsey and Company, Inc., and specifies how the funds shall be used to respond to the negative impacts of the opioid epidemic

Includes provisions to require studying, surveying, and reporting to address school health support personnel and appropriates funds for an additional 115 school psychologists

Provides funds from the Juul settlement for the NC DHHS Division of Public Health for youth tobacco and nicotine dependence prevention and cessation activities; funding includes $13 million non-recurring in year 1; $8 million nonrecurring in year 2. Of these funds, $2 million will reimburse litigations costs incurred by the Attorney General for the Juul litigation.


Sources and Additional Information:

For full listing of budget-related provisions organized by category, please see North Carolina Medical Society

For comparison chart of nonprofit budget provisions organized by category, please see NC Center for Nonprofits’ Comparison of Nonprofit Provisions in NC House and NC Senate Budget Proposals for FY2021-2023

NC Rural Health Leadership Alliance: State Budget Update

Child Fatality Task Force update