Alessandra Fabrello’s days are long, her worries constant. For nearly two decades, she has been the primary medical caregiver for her son, Ysadore Maklakoff, who was diagnosed as a baby with acute necrotizing encephalopathy—a rare brain condition that changed both of their lives forever. From their home in Chapel Hill, North Carolina, Fabrello has learned to deliver the kind of skilled care that would normally be provided by a doctor, nurse, or therapist. She does this not only out of love but out of necessity: Ysadore qualifies for a wide range of in-home services through North Carolina’s Medicaid program, yet actually securing those services is another matter entirely.
“He struggles to survive every single day. It is almost impossible to explain what it takes to keep a child alive who should be dead,” Fabrello recently told NPR, her voice heavy with exhaustion and frustration. For years, she has worked with staffing agencies to arrange for the help her son is entitled to, but the state’s low Medicaid reimbursement rates have always made it difficult to find providers willing to take on the job. Now, things are about to get even harder.
On October 1, 2025, North Carolina implemented sweeping cuts to Medicaid provider payments. These reductions include a minimum 3% pay cut for all providers who treat Medicaid patients, with primary care doctors seeing their rates slashed by 8% and specialists by a staggering 10%, according to the North Carolina Department of Health and Human Services. The move comes at a time when more than three million North Carolinians rely on Medicaid, and as the state braces for the loss of approximately $23 billion in federal Medicaid funding over the next decade due to changes in federal policy, as reported by KFF Health News.
For families like the Fabrellos, the consequences are immediate and deeply personal. Ysadore’s dentist has already warned that, come November, they may no longer accept Medicaid patients. Fabrello fears this is just the beginning. “When you say, ‘We’re just cutting provider rates,’ you’re really cutting access for him for all his needs,” she explained to KFF Health News. Even before the cuts, Ysadore was receiving only about 50 hours of skilled nursing care per week—less than half of the 112 hours he qualifies for. Occupational therapy, speech therapy, and respite care are all nearly impossible to obtain.
Shannon Dowler, former chief medical officer for North Carolina Medicaid, is blunt about the risks. She told KFF Health News that reduced payments will shrink the number of providers in the Medicaid network, leading to “an immediate loss of access to care, worse outcomes, and cause higher downstream costs.” She emphasized that these state-level cuts are separate from the looming federal reductions, likening the situation to “layers of the onion.” In her words, “We are hurting ourselves in North Carolina way ahead of the game, way before we need to do this.”
The root of the problem is both local and national. Medicaid is a joint program between the federal government and the states, designed to provide health insurance for people with low incomes or disabilities. It’s a massive undertaking: Medicaid covers more than 70 million Americans and typically accounts for about 19% of any given state’s general fund spending, second only to K-12 education, according to the National Association of State Budget Officers.
But state budgets are under pressure. The federal COVID-19 relief funds that helped plug budget gaps have dried up in 2025. Meanwhile, costs for Medicaid, housing, education, and disaster response have all risen. Some states, including North Carolina, have cut income and property taxes, further shrinking available revenue. And on top of it all, President Trump’s signature tax-and-spending legislation is projected to slash federal Medicaid spending by nearly $1 trillion over the next decade, forcing states to either find new sources of funding or make painful cuts.
In North Carolina, the Medicaid agency has asked for more funding than it received every year since at least 2019. This July, lawmakers agreed to a temporary funding increase that was still $319 million short of what the agency requested. With little choice, officials opted to reduce payments to all providers rather than eliminate optional services or further restrict eligibility. “It’s a tough moment for North Carolina,” Jay Ludlam, deputy secretary for North Carolina Medicaid, told KFF Health News. “The cut in the budget is absolutely the opposite direction of where we really want to go, need to go, have been headed as a state.”
The situation is not unique to North Carolina. Idaho, with about 350,000 Medicaid enrollees, announced a 4% across-the-board pay cut for Medicaid providers in September 2025 to address an $80 million budget shortfall. The response from healthcare facilities has been swift and anxious. According to the Idaho Hospital Association, some small hospitals—those with 25 or fewer beds—reported having less than two days’ cash on hand to make payroll. Others had only about a month’s cushion. “Hopefully, none of them will close,” said Toni Lawson, the association’s chief advocacy officer, though she warned that labor and delivery units, as well as behavioral health services, are likely to be the first casualties.
For providers and families alike, the consequences of these cuts are already being felt. Medicaid has long paid less than private insurance, making it difficult to attract enough doctors, nurses, and therapists to serve the population. Now, with payments reduced even further, many providers are opting out altogether. As Bram Sable-Smith of KFF Health News explained on NPR, “When you cut payments to doctors and to nurses and to physical therapists, they become less likely to accept patients that have Medicaid coverage.” The result is a growing gap between what Medicaid promises and what it can actually deliver.
For caregivers like Fabrello, the financial strain is acute. She was unable to work outside the home due to her son’s needs and was nearly bankrupt before North Carolina began paying parents for caregiving. That income has been a lifeline, but now, even that is being reduced. “As parents, we are essential lifelines to our children, and we are struggling to fight for our own survival on top of it,” Fabrello told KFF Health News.
As states across the country grapple with rising costs and shrinking revenues, the story unfolding in North Carolina and Idaho may well be a preview of what’s to come elsewhere. The choices are stark: raise new revenue, cut provider payments, or reduce services. For families like the Fabrellos, the stakes couldn’t be higher. Every dollar cut from Medicaid is a dollar that might mean the difference between care and crisis, between dignity and desperation.
In the end, as lawmakers debate budgets and balance sheets, it’s the most vulnerable—children, the disabled, the elderly—who are left to bear the heaviest burden. Their stories, often hidden behind statistics and spreadsheets, are a powerful reminder of what’s really at stake when the safety net begins to fray.
