Public Policy Update - January 19, 2026

Read a summary of recent public policy updates that may be of interest to North Carolinians with intellectual and other developmental disabilities (I/DD). These updates are current as of January 19, 2026.

FEDERAL

Budget

The current continuing resolution (CR) expires at the end of January, which makes passing a new CR or full-year funding bill a time-sensitive priority in Congress. Senate and House leaders have been working on funding bills. On January 15th, the Senate passed legislation that would provide full-year Commerce, Justice, and Science, Energy and Water Development, and Interior and Environment appropriations by a vote of 82 to 15, sending the measure to President Trump for his signature. The House previously passed this bill on January 8th by a vote of 397 to 28.

Programs Affecting People with Disabilities Covered under the Labor-Health and Human Services-Education (LHHS) Bill

On January 20th, the House Appropriations Committee released the Consolidated Appropriations Act for 2026. Negotiated and delivered on a bipartisan, bicameral basis, the legislation includes appropriations for Labor, Health and Human Services; Education and Transportation, Housing and Urban Development; and Defense Homeland Security. Of most interest to the I/DD community is the LHHS and Education budget. The bill includes $224 billion for programs and activities, which is more than $50 billion above the Trump Administration’s budget request. However, overall funding proposed for Health and Human Services is $108 billion, which is $7 billion or 6% below the 2025 level.

A few highlights:

• Employment - $2.9 billion for Workforce Innovation and Opportunity Act State Grants, which is a reduction from 2025.
• Centers for Medicare & Medicaid Services (CMS) Program Management – total of $4.1 billion for CMS administrative expenses, equal to the 2025 level.
• Head Start - $12.4 billion which is an increase of $85 million above the 2025 level.
• Administration for Community Living (ACL)- $2.5 billion for ACL, which represents level funding for 2025.
• Special Education – $15.5 billion, which is an increase of $23 million above the 2025 level.

It is expected that there will be a House floor vote on Thursday, January 22nd. The Senate returns the week of January 27th and is expected to address the bill in an effort to meet the January 31st deadline.

Affordable Care Act (ACA) Subsidies

On December 31st, the enhanced Affordable Care Act (ACA) subsidies included in the American Rescue Plan Act and the Inflation Reduction Act expired. The loss of subsidies will result in millions of Americans facing significantly higher monthly health insurance premiums, with some costs potentially doubling, leading to reduced enrollment and fears of compromising care.

The House of Representatives passed a bipartisan bill to extend enhanced ACA tax credits for three years in early January 2026. However, the Senate has not yet successfully dealt with extending the subsidies as of mid-January. Senate Majority Leader Thune has refused to bring the bill to a vote, citing concerns about fraud and "waste" in the ACA. As of January 17th, the Senate went on recess, and no deal had been reached to extend the subsidies, with millions facing higher costs as open enrollment closes. The focus shifts to whether any compromise can emerge after the recess, though the outlook is uncertain.

Changes in Childhood Vaccine Schedule

The Centers for Disease Control and Prevention (CDC) has made changes to the childhood vaccine schedule, easing guidance for the rotavirus, meningococcal disease, hepatitis A, respiratory syncytial virus (RSV), and flu vaccines.

In addition, the CDC is removing the requirements for states to report pediatric vaccination data. States have to report data on Medicaid and Children’s Health Insurance Program (CHIP) care delivered, including prenatal and pediatric immunization data. Now, CMS is removing the immunization data portion of what states have to report to CMS.

These new recommendations may be confusing for people who want to get vaccinated and for pharmacies that provide the vaccines. These new guidelines and the previous weaker endorsement of COVID vaccines could result in fewer people getting vaccinated. This could disproportionately affect people with disabilities—especially people who are immunocompromised or use assistive technology to help them breathe.

ABLE Accounts

ABLE accounts will be available to Americans with disabilities whose disability onset is by age 46. Until now, the age limit has been 26. In addition to expanding the eligibility pool, people with disabilities will also be able to save more money in their ABLE accounts in 2026. The contribution limit will increase to $20,000 (up from $19,000) this year. Workers with disabilities living in the 48 contiguous states are allowed to save up to $15,650 in earnings in ABLE accounts above and beyond the gift tax limit for the year if they do not participate in an employer-sponsored retirement plan, according to the ABLE National Resource Center. In addition, the legislation ensures that funds from traditional 529 college savings plans can roll over into ABLE accounts.

Grants Cut for American Academy of Pediatrics (AAP)

The Department of Health and Human Services (HHS) cancelled seven federal grants worth millions of dollars for the American Academy of Pediatrics (AAP). The funding included money for projects to prevent fetal alcohol syndrome, reduce sudden infant death syndrome, and identify autism early. The AAP works to improve the health and well-being of infants, children, and young adults. The Administration cited several reasons for the cancellation, including AAP's use of 'identity-based language,' such as references to racial disparities and 'pregnant people,' and insufficient focus in at least one grant program on nutrition and chronic disease prevention, which they said do not align with the agency's priorities. The AAP is currently suing HHS over its changed vaccine policies.

STATE

Medicaid Rates

The second week of December, Governor Stein announced that the Medicaid cuts to providers that were put in place on October 1, 2025, are ending. The cuts were in response to the General Assembly allocating dollars that will fund Medicaid only through April 2026. The cuts are being reversed following successful legal challenges and no additional action from the legislature.

Providers get full payment for past and future services at pre-cut levels. The updated NC Medicaid Direct fee schedules were posted on the Department’s Fee Schedules and Covered Codes Portal in January. NC Medicaid annual procedure code updates will also be reflected in the updated NC Medicaid Direct fee schedules posted. Provider claims that were billed at the reduced rates will be re-processed.

The underlying $319 million funding gap is not yet resolved. The responsibility now falls back to the General Assembly to provide a long-term financial solution for Medicaid.

NC Ombudsman Program

The contract with Legal Aid of North Carolina (LANC) and its subcontractors to run the NC Medicaid Member Ombudsman program ended on December 31, 2025, due to a $33 million budget shortfall in the state's Medicaid Managed Care Oversight Fund. The essential functions of the Member Ombudsman program transitioned to the North Carolina Department of Health and Human Services (NCDHHS), Division of Health Benefits (NC Medicaid), starting January 2, 2026.

While the essential aspects of the program continue, there are some reductions in services due to the reduced funding. NCDHHS Ombudsman agents will no longer refer beneficiaries directly to social needs programs (like food or housing assistance) or legal assistance, but will instead connect them to their health plan for care management support.

The original phone number (877-201-3750) and website (which redirects to a new page on the NC Medicaid website) remain operational.