A pioneering Medicaid program that has delivered food, housing support, and transportation to nearly 30,000 low-income North Carolinians is set to end July 1. The state Department of Health and Human Services issued a shutdown notice Monday, citing lack of funding in the proposed state budget.

The Healthy Opportunities Pilot, or HOP, was the first program in the country to use federal Medicaid dollars to pay for nonmedical services that support health. In Western North Carolina, where 18 counties and the Qualla Boundary participate, the program served as a key recovery tool following Hurricane Helene.

“It came fast,” said Laurie Stradley, CEO of Impact Health, which coordinates the program in WNC. “We were hoping for a path to bridge the gap. Instead, we were told we have 28 days to unwind this.”

Stradley left for Raleigh the day after learning about the shutdown, joining others for a June 4 advocacy day organized in direct response to the announcement. Speaking to BPR from her car, she said the program’s end is “devastating.” She noted that HOP currently supports over 13,000 individuals in the region, representing thousands more in household reach.

“There are so many layers of effect,” she said. “You’re talking about food on the table, job stability, and kids staying in school — and you’re pulling the plug on all of that.”

‘It’s not just about health — it’s jobs’

The decision to halt services comes even as data shows the program is working. An independent study published this year in the journal JAMA found that among roughly 1,000 participants, the pilot reduced emergency room visits, shortened hospital stays, and saved more than $1,000 per person annually in terms of public taxpayer programs and health care costs.

Still, Republican budget proposals in the General Assembly would cut the program. Legislators are expected to deliver a final budget to Gov. Josh Stein by June 30, the end of the fiscal year.

Jay Ludlam, North Carolina’s Medicaid Director, noted that lower revenue forecasts have made this a difficult budget year, with lawmakers facing tough choices. He said it would be “fiscally irresponsible” to allow services to continue without a clear source of reimbursement.

“We’ve seen families get healthier and save the state money,” Ludlam said. “But continuing the program would put organizations at serious financial risk.”

That risk is front of mind for N.C. Rep. Eric Ager (D–Fairview), who described the lack of funding as a “really short-sighted omission.”

“I think the reality of it is that the budget writers aren’t smart enough on the program to know the huge impacts that it has,” Ager told BPR. He said lawmakers are looking for anywhere to cut in a cost-conscious budget year, and that HOP appeared to be an easy target. “I’m hopeful that we can make the case {in legislators’ budget conference committee} it’s worth putting back in there because it saves money in the long run.”

He added that the program is especially important in Western North Carolina, “A lot of this money was used to buy good, healthy food from local farmers, and I think that’s going to be another big hit to the local economy.”

BPR reached out to N.C. Sen. Ralph Hise (R–Spruce Pine), a key budget writer and member of Senate leadership, for comment. He had not responded by the time of publication.

Food delivery and housing repairs, tailored to rural realities 

The Healthy Opportunities Pilot launched in 2022 with federal approval through a Medicaid waiver. Services included:

• Healthy food boxes and produce prescriptions
• Rides to medical appointments
• Legal aid for benefits and housing disputes
• Home repairs that remove health risks

In rural Western North Carolina, where winding roads and isolation create access barriers, HOP delivered help directly to homes.

“We were able to remove carpet with mold, install HEPA filters — things that literally kept kids out of the ER,” Stradley said. “This is health care, just not the kind that happens in a doctor’s office.”

MANNA FoodBank, one of more than 60 regional partners, said the pilot has made a measurable difference. “It helps prevent health crises before they begin,” said Communications Director Micah Chrisman. “Without it, more families will be forced to choose between groceries and medicine.”

Chrisman said MANNA delivered healthy food boxes to Medicaid recipients dealing with chronic illness and transportation challenges. In April, the food bank served nearly 190,000 people — its highest monthly total in 42 years. Without HOP, Chrisman estimated more than 300 local jobs could be affected, including drivers, case managers and farm distributors.

The nonprofit ASAP (Appalachian Sustainable Agriculture Project) also used HOP funds to expand its Farm Fresh Produce Prescription program. In 2024 alone, more than 675 households participated, and $215,000 went directly to local farms.

Caja Solidaria, a nonprofit that operates mobile food markets in Henderson and Transylvania counties, is also in Raleigh advocating for continued funding. Interim co-directors Amy Landers and Christina Schnabel told BPR they were speaking with lawmakers on the grounds of the Legislative Building and delivering North Carolina peaches to elected officials.

They said the pilot allowed their team of community health workers to deliver produce boxes to people living up mountain roads and in remote areas—and to help connect clients with other support.

“Without this pilot, I would not be where I’m at right now,” Schnabel said, recalling how she first came to the organization as a volunteer and early HOP recipient. “It really is my livelihood. It allowed me to buy healthy food, pay for health insurance, and eventually buy my own house.”

‘We were just sharing the success on Friday’ 

Just days before the state announced the program would shut down, HOP was featured at a health symposium in Chapel Hill for its innovation and outcomes. “We were just sharing the success on Friday,” Stradley said. “Then the shutdown notice came Monday.”

Ludlam called it a “temporary setback” and said he hopes the legislature will revisit the decision.

“It improves health, reduces costs, and strengthens communities — and it does it in a way that is local,” he said. “I’ve worked in Medicaid for 18 years, and I’ve never seen a program that improves health, reduces costs, and strengthens communities the way this one does.”

Stradley is also looking for a path forward. “We’re going to make sure no one has the excuse of saying, ‘I didn’t know,’” Stradley told BPR as she continued her journey to Raleigh.

“This program is a model for how we spend health care dollars better — before people get sick — and in a way that actually improves outcomes and supports the whole community.”

What is the Healthy Opportunities Pilot?

• Approved in 2018 through a federal Medicaid waiver
• Launched in 2022 in three pilot regions
• Western North Carolina participation coordinated by Impact Health
• Covers nonmedical services like food, housing repairs, transportation, and legal support
• Delivers  services to nearly 30,000 people statewide
• Scheduled to end July 1, 2025, unless funding is added to the final state budget