House Bill 491 appropriates $190 million in nonrecurring funds from North Carolina’s Medicaid Contingency Reserve to the Department of Health and Human Services, Division of Health Benefits, for the 2025-2026 fiscal year. The money is intended to “rebase” Medicaid funding by adjusting for projected changes in enrollment, changes in the mix of enrollees, service and capitation costs, federal match rates, and the rollout of the Children and Families Specialty Plan in December 2025.
The bill also requires local management entities/managed care organizations (LME/MCOs) to make intergovernmental transfers to DHB totaling about $18.0 million in each of fiscal years 2025-2026 and 2026-2027. The bill specifies each participating LME/MCO’s share and gives DHB authority to reallocate those amounts if county realignment changes an organization’s catchment area during the biennium. The act is retroactive to July 1, 2025, unless otherwise provided.
HB491 affects state Medicaid financing by redirecting reserve funds to cover updated program costs and by establishing a new two-year transfer requirement from behavioral health managed care organizations to DHB. It modifies how Medicaid funding is adjusted midstream, and it gives DHB flexibility to redistribute transfer obligations if service areas change. The bill primarily impacts DHHS, Medicaid recipients, LME/MCOs, and counties involved in managed care realignment.
The available record shows no recorded votes or committee debate, so there is no direct transcript evidence of support or opposition. The bill’s committee substitute favorable status suggests it advanced through committee without documented controversy in the provided materials. Overall, the measure appears to be a routine budgetary and administrative Medicaid funding bill rather than a highly contentious policy proposal.
The main potential points of contention are fiscal and administrative: whether the Medicaid Contingency Reserve should be used for this purpose, whether the $190 million appropriation is sufficient to cover enrollment and cost changes, and whether the required LME/MCO transfers are equitable across organizations. Another possible issue is DHB’s authority to reallocate transfer amounts if counties move between LME/MCOs, which could affect how costs are distributed among regional behavioral health entities. No specific objections or supporters are identified in the provided record.