North Carolina just issued a new Medicaid rebase, cutting rates for Therapeutic Foster Care by 3% and Residential Services for youth by 10%.
Let that sink in.
These are not cuts to peripheral services. These are reductions to the very programs designed to support children who have experienced the greatest trauma; kids who need stability, healing and hope.
And here’s the truth: even before this reduction, Medicaid rates did not cover the true cost of quality care.
At Thompson, we serve thousands of children every year through Therapeutic Foster Care and Residential Treatment. These are intensive, highly specialized services that require licensed clinicians, 24/7 staff coverage, trauma-informed training and facilities that meet strict regulatory and safety standards. The costs of providing this care responsibly, and with excellence, rise every year with inflation, wages and the cost of goods. Yet reimbursement rates rarely keep pace.
This rebase moves us backward, at a time when North Carolina’s children can least afford it.
What This Means for Kids and Families
When funding fails to reflect reality, quality suffers first:
- Providers must stretch already thin budgets to cover staff wages, food and therapeutic resources.
- Agencies may have to limit capacity, meaning fewer beds, fewer foster homes and longer waits for placement.
- Most critically, children lose access to the consistent, high-quality care they need to heal and thrive.
At Thompson, our mission has always been to increase impact, not just stay afloat. We invest in staff training, data systems and team well-being because quality care changes outcomes. But sustained underfunding threatens that very model.
We cannot build a system of care on financial quicksand.
There Has to Be a Better Way
North Carolina Medicaid rates need a modern formula that reflects the real cost of care:
- Include inflationary escalators that automatically adjust as costs rise.
- Engage policymakers in partnership with providers to ensure fiscal sustainability.
- Encourage the community, including donors, foundations and business partners, to recognize that public funding alone cannot maintain quality.
If we want to change the trajectory for children in North Carolina, we must invest in stability. Not just for families, but for the organizations that serve them.
What You Can Do
You can help:
- Advocate: Contact your legislators to express concern about Medicaid cuts to children’s services.
- Invest: Partner with organizations like Thompson that lead with quality, accountability and data-driven impact.
- Educate: Help your networks understand that every percentage point cut to child welfare services is a step away from safety, healing and hope for a child.
At Thompson, we remain steadfast in our mission: to strengthen children, families and communities. But we can’t do it alone; not sustainably, not without community resolve.
Because when the system underfunds care, it’s the children who pay the price.
There has to be a better way. Let’s build it, together.
