Scaled-back version of NC’s rural health pilot will return in January

By Jaymie Baxley

The Healthy Opportunities Pilot, a first-of-its-kind initiative that used Medicaid dollars to address non-medical health needs of rural North Carolinians, will resume in January after an 18-month pause.

However, the scope of the program will be drastically reduced.

Before it was halted in July 2025, HOP offered nearly 30 nonclinical services to Medicaid beneficiaries in three largely rural regions of the state.

All of these services centered on what public health experts often refer to as the “social determinants of health” — an umbrella term that encompasses food, housing, transportation and other needs that, when left unmet, can adversely affect well-being.

Only one service will be offered when the pilot returns next year: deliveries of small boxes of groceries to food-insecure households.

Laurie Stradley, CEO of Impact Health, said her organization, which oversees HOP across 18 counties in western North Carolina, was told Thursday about the January start date by the N.C. Department of Health and Human Services.

“The regions and our partners are ready,” Stradley said during a meeting of the Western North Carolina Health Policy Initiative on Friday. “We could start today, but it is a federal program that requires a lot of ticks and ties to make sure that we are in full compliance when we get this project up and running again.”

What HOP delivered

HOP launched in 2022 under a waiver to the state’s Medicaid plan approved during the first Trump administration by the federal Centers for Medicare and Medicaid Services. The changes allowed North Carolina to use federal Medicaid funds, usually reserved solely for medical care, to pay for food, housing, transportation and other needs.

The philosophy of the program was simple: Investing in people’s basic needs up front could keep them healthier, keep them out of the hospital and ultimately save Medicaid money.

“We operated that program with great success for three and a half years, showing real cost savings and better health outcomes,” Stradley said. “It was an incredible run.”

The program helped more than 30,000 people across 33 counties. In addition to the western region overseen by Impact Health, the program was available to beneficiaries in regions managed by Access East in the northeastern part of the state and by Community Care of the Lower Cape Fear in the southeast.

An independent evaluation found that the program lowered health care costs by as much as $1,020 per participant per year. A subsequent report published in March by the Cecil G. Sheps Center for Health Services Research at UNC estimated HOP was associated with $164 less in monthly health care spending per participant, on average, over the program’s first 32 months.

The pilot also boosted local economies. An analysis from 2025 estimated that the $75 million spent on HOP services in western North Carolina over three years generated $114 million in business activity and nearly 900 full-time jobs.

“Those funds stayed right here in our region and recirculated,” Stradley said. “It paid local plumbers. It paid carpenters. It purchased foods from over 400 local farms.”

Still, some lawmakers were not persuaded. Services ground to a halt in July 2025 after state legislators failed to approve the funding needed to renew the program.

The state budget that passed earlier this summer earmarked $25 million in nonrecurring funds to restart HOP — far less than the requested $80 million.

Stradley said the money is “about a 10th of what it would take for us to operate at full steam.”

Smaller boxes, stricter rules

Beyond the scale of the program, the way it works will change.

Previously, food boxes were available to any food-insecure household participating in the program. Under the new version of the pilot, participants must be food-insecure and either pregnant or diagnosed with cardiovascular disease or diabetes.

Those limitations mean the program might not be able to help people like Christina Schnabel, whose 6-year-old son with gastrointestinal problems was helped by getting fresh fruits and vegetables. 

The boxes will also be smaller. Before the pause, food deliveries were sized to the household. Now, each eligible household will receive a box meant to feed about two people two meals a day for a week.

The changes will significantly cut the number of people who can get assistance. Stradley estimated that Impact Health will serve between 3,500 and 5,000 people during the first six months of the program’s restart; it was serving nearly 14,000 when the pilot was suspended.

The new version will also change how beneficiaries are connected to services.

Previously, community-based organizations and care management providers played a big part in identifying people who needed assistance, determining eligibility and coordinating referrals. Those organizations received compensation for the work involved in administering HOP.

That funding will not be available when the program resumes.

Instead, Medicaid managed care health plans, known as prepaid health plans, will be responsible for care management and referrals. Stradley said that could make the process more cumbersome for some beneficiaries, particularly those who already have care managers through their health care providers.

Some care management organizations may still help connect patients with HOP services, but they won’t get paid specifically to do so.

“It’s a time-consuming referral process because sometimes you have to track down the right agency for the right person in the right county,” Stradley said.

The funding changes could also make it harder for some community organizations to participate. The original HOP provided money that helped local organizations cover startup expenses while waiting for reimbursements. Those funds will not be available during the restart.

With fewer participants and less money available to cover administration, Stradley expects fewer organizations to be able to provide food deliveries.

The program will also take a more proactive approach to finding people who qualify. Rather than relying largely on people to seek out services themselves, Impact Health and its partners plan to work with Medicaid health plans and the state to identify people who meet the new eligibility requirements.

The narrower eligibility requirements raise questions about which populations will no longer have access to the program.

Children, who benefited from services such as housing repairs and improvements, are among those who could be affected by the changes.

Stradley said roughly 30 percent of the people served by HOP before its suspension were children. She worried that the new eligibility criteria could leave many of them without direct assistance.

She also expressed concern about the limited window of eligibility for pregnant beneficiaries. Pregnancy qualifies someone for assistance, but Stradley said she hopes the state will consider allowing food deliveries to continue after a person gives birth.

“If there are children present in the household and food insecurity is a major issue, then we know that the pregnant individual is the least likely to consume that food,” she said.

Stradley said she expects the smaller program will still produce health benefits and savings, although she anticipates the financial return will be lower without services such as home repairs and housing improvements.

Nearly 90 percent of HOP participants in the previous version of the program said they were food-insecure, she said, making food assistance a logical place to restart.

But housing interventions, particularly those that address unhealthy living conditions, often produce a greater return on investment, Stradley said.

Toll of the pause

Research conducted after the program’s suspension offers a glimpse of what the loss of those services has meant for some western North Carolina residents.

Alex Mitchell, senior project manager for the NC Center for Health and Wellness at UNC Asheville, presented findings from a study examining the effects of HOP’s discontinuation during the same policy meeting.

A survey of 138 former HOP participants who had received food boxes found that nearly 80 percent said they had a harder time getting enough food after the program ended. Nearly 83 percent said it was harder to maintain a healthy diet, and almost 90 percent said their household sometimes or often ran out of food before they had money to buy more.

The research also included focus groups with representatives from dozens of human service organizations. Mitchell said those organizations described cutting services, laying off employees and, in some cases, closing after HOP funding disappeared.

The suspension also damaged relationships between service providers and the people they had been helping, Mitchell said. 

“Clients didn’t feel like they could depend on these organizations anymore,” he said. “A lot of people felt like HOP was sort of yanked out from under them. They didn’t feel like they had warning.”

For Stradley, the January restart is an opportunity to rebuild some of that infrastructure and keep making the case for a broader program.

The current Medicaid waiver has about two and a half years remaining, she said, giving state officials and program administrators a limited window to demonstrate the value of the interventions and advocate for more funding.

Stradley said she hopes the state will restore more of the original services and consider adding more counties to the program.

For now, she said, the immediate priority is getting the program running again, collecting more data and using that information to make the case for keeping it alive.

“Let’s get the pump primed with food,” she said.

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