New North Carolina Law Will Help Address Substance Use Disorders

With bipartisan support from lawmakers statewide, North Carolina Governor Josh Stein (D) signed legislation July 7 that includes two key provisions to help residents with substance use disorders receive the care they need.

Among other reforms, H.B. 546 requires the North Carolina Department of Health and Human Services to suspend, rather than terminate, Medicaid coverage for people entering jails, bringing the state in line with federal requirements that go into effect Jan. 1, 2026. This distinction matters because Medicaid generally does not pay for health care provided in state and local prisons and jails. Such facilities are responsible for health care costs of individuals while they are incarcerated. Terminating Medicaid coverage for a person in jail or prison can make it harder for them to get access to substance use treatment upon release, and that increases their risk of overdose and death.

At least 128,000 people are booked into local jails in North Carolina annually. Nationally, most people entering such facilities have relatively short stays, so terminating Medicaid coverage can be particularly disruptive for those needing substance use treatment. Suspending Medicaid benefits, rather than terminating them, allows individuals to regain coverage promptly after release. This means that people will be more likely to continue treatment, which reduces their overdose risk. In addition, suspending Medicaid coverage will help the state to significantly reduce the administrative costs associated with reinstating benefits.

H.B. 546 also modernizes the state’s Medicaid program by requiring the Department of Health and Human Services to develop a plan for paying health care providers that screen for substance use disorders and provide prescription medications for opioid use disorder (OUD) and alcohol use disorder, as well as recovery support and case management. Policymakers designed this payment structure to help community-based providers, notably primary care providers, better meet their patients’ needs.

North Carolina expanded Medicaid only recently, in late 2023, so many regions of the state lack any Medicaid providers that offer medications for OUD. Engaging primary care and other community-based providers in offering substance use treatment can help to increase the number of people who receive lifesaving care, especially those in rural areas.

“As a North Carolina family doctor that provides treatment for substance use disorders, I have seen firsthand how Medicaid termination can create a dangerous lapse in treatment access and put my patients at risk for reincarceration and overdose,” said Dr. Shuchin Shukla, an addiction medicine physician based in Asheville. “And without appropriate reimbursement support to manage these complex patients, barriers to treatment access will persist, increasing community health and public safety harms while simultaneously increasing costs. This bill addresses these issues head-on, a critical leap forward for North Carolina.”

The provisions—passed in both chambers without a no vote—were supported by a bipartisan group of legislators, including Representatives Donna White (R) and Timothy Reeder (R), both chairs of the House Health Committee, as well as Representatives Heather Rhyne (R) and Allen Chesser (R). Senate Health Care Committee Chair Jim Burgin (R) and staff for Senate President Pro Tempore Phil Berger (R)—with leadership from Madison Alligood, Berger’s deputy general counsel and policy adviser—also worked to pass the law. Their efforts were informed by Pew’s substance use prevention and treatment initiative, whose staff worked with state lawmakers over recent months on policies to improve substance use treatment in North Carolina.

“I’m proud to have worked with my legislative colleagues to pass these meaningful Medicaid reforms,” said White, who represents Johnston County. “It remains a priority for me that North Carolina is known for its access to health care as much as it’s known for its outstanding universities and business climate.”

Although access to substance use treatment remains out of reach for many people nationwide, North Carolina has taken important steps to help its residents to receive lifesaving care.

Andrew Whitacre works on The Pew Charitable Trusts’ substance use prevention and treatment initiative.