North Carolina Personal Care Services Alignment Demonstration FAQs

Section 1115 Demonstrations provide states authority for experimental, pilot, or demonstration projects that are likely to assist in promoting the objectives of the Medicaid program. These demonstrations give states additional program flexibilities, allowing states to evaluate new approaches to better serving Medicaid populations. All 1115 Demonstrations must be approved by the Centers for Medicare & Medicaid Services (CMS).

Session Law 2025-64 (House Bill 546) directs the North Carolina Department of Health and Human services to pursue an expansion of Medicaid coverage of personal care services to individuals who reside in licensed adult care homes and special care units and whose income exceeds the limit for participation in the State/County Special Assistance Program.

The demonstration would extend Medicaid coverage for personal care services (PCS) to eligible Medicare beneficiaries in adult care homes and special care units who are currently ineligible for Medicaid-covered PCS in those settings due to their income. Personal care services are the only Medicaid services that would be covered by this demonstration. Eligible individuals would remain responsible for room and board.

Personal care services are hands-on support with daily activities such as bathing, dressing, eating, mobility and toileting. To be eligible for the demonstration, individuals would need to have an assessed clinical need for these services, along with meeting other eligibility criteria.

Individuals who meet all the following criteria would be eligible for the demonstration:

• Be enrolled in Medicare and reside in, or be seeking admission to, a licensed adult care home or special care unit;
• Have an assessed clinical need for personal care services under North Carolina's Medicaid criteria (Clinical Coverage Policy 3L-1);
• Have income above the State-County Special Assistance limit but within the demonstration ceilings
  • Up to 180% of the federal poverty level for adult care home residents 
  • Up to 200% for special care unit residents; and
• Meet all other Special Assistance program requirements (such as resource limits) and Medicaid non-financial rules (such as North Carolina residency).

To be eligible for the demonstration, a person must reside in, or be applying to reside in, one of the following types of facilities:

• Adult Care Home 
• Family Care Home
• Special Care Unit within an Adult Care Home
• Adult Care Home section of a Combination Home

Under federal regulations, 1115 demonstrations must be “budget neutral” to the federal government. This means that they will not cost more in federal funds than would have been spent without the demonstration. Additionally, Session Law 2025-64 (House Bill 546), the state law authorizing the demonstration, requires the state to ensure the cost of the new coverage is offset by savings or cost avoidance. 

No, your benefits will not change. The demonstration has no impact on coverage or costs for people already enrolled in Medicaid.

The State/County Special Assistance Program provides a cash supplement to low-income individuals to help pay for room and board in residential facilities such as adult care homes. Individuals eligible for the Special Assistance program already qualify for Medicaid and will not participate in the demonstration.

This demonstration would only provide Medicaid coverage of personal care services. Individuals would not receive assistance paying for room and board; Medicaid does not cover room and board.

Yes, the state’s application must be approved by CMS. CMS determines if the demonstration meets the requirement of 42 CFR 431 Subpart G and has broad discretion to approve demonstrations, request changes to demonstrations prior to approval, or deny 1115 demonstration applications. 

The demonstration application that will be submitted to CMS is available here (add link). 

North Carolina is conducting a public comment period before submitting the application to the Centers for Medicare & Medicaid Services (CMS). The public is invited to review the application and submit comments during the State comment period.

State public comment period: Sept. 10, 2026 – Nov. 9, 2026

Submit comments to:  

Email: Medicaid.NCEngagement@dhhs.nc.gov

(Subject line: “NC Section 1115 Waiver”)

Mail: 

North Carolina Department of Health and Human Services
NC Medicaid Section 1115 Waiver Team
1950 Mail Service Center
Raleigh, NC 27699-1950 

(Please indicate “NC Section 1115 Waiver” in the written message)

Public hearings:

North Carolina will host the following four public hearings to seek input regarding this waiver.

CMS does not have a required time limit for reviewing 1115 demonstration applications. They may have additional questions for the state before making a decision. Demonstration approval often takes up to a year from application submission.

If the demonstration is approved, NC Medicaid will need time to make operational and system changes before people can begin applying for the new coverage. Information on when the new coverage will start and how to apply will be made publicly available prior to launch. 

Eligibility will be determined by your local DSS office — the same way Medicaid applications are handled now. For more information visit the How To Apply for NC Medicaid website page.

While it’s impossible to know exactly how many people would enroll in the demonstration if it’s approved, North Carolina’s demonstration application estimates that 6,000 people would enroll during the five-year period of the demonstration.

If the demonstration is approved, there are still many changes that need to be made to the NC Medicaid program before people can begin applying for the new coverage. Information on when the new coverage will start and how to apply will be made publicly available prior to launch.