‘Housing is health care’: Trump’s Medicaid cuts could leave thousands of NC families homeless

From rent deposits to mold repairs, Medicaid has helped pay for housing help in NC. Now with federal cuts and state budget gridlock, those lifelines may vanish.

The floodwaters came first, rising through a Haywood County neighborhood and driving rats into one family’s home. One child was bitten, another began wheezing as mold spread through the damp walls. Their mother, a nursing student at the time, struggled to finish her degree while her husband worked full-time without health insurance.

That story—shared with Impact Health by one of its nonprofit partners and recounted to Cardinal & Pine by CEO Laurie Stradley—shows what Medicaid can mean in practice. With support for safe housing, the family was eventually able to move into a clean apartment. The children’s health improved, their mother graduated, and today she works full-time at a nonprofit, helping other families through the same maze.

Now advocates warn that stories like this may soon be much harder to come by. In July, President Trump signed the One Big Beautiful Bill Act that includes deep cuts to Medicaid, which could force North Carolina to roll back expansion. If that happens, more than 670,000 residents could lose coverage—and with it, the housing-related support Medicaid has increasingly provided.

READ MORE: Congress passes Trump’s ‘One, Big Beautiful Bill’ and sends it to him to sign

Medicaid isn’t just health insurance. In North Carolina, it’s been funding Health-Related Social Needs—things such as first month’s rent, eviction prevention, home repairs, and wheelchair ramps for disabled seniors. Those supports flowed through the state’s Healthy Opportunities Pilot, a program that ended in July and tested how Medicaid can help pay for basic needs as families get back on their feet. For families already on the brink, losing access to these aids could mean falling back into unsafe homes or into homelessness altogether.

Regional fallout

In Western North Carolina, the timing could not be worse. Sept. 27 marks the one-year anniversary of Hurricane Helene’s landfall, a storm that destroyed thousands of housing units.  Repairs have been slow, and recovery has stretched thin.

“Taking Medicaid funding out of that recovery is like taking the fourth leg off a stool,” Stradley said. “Everything becomes harder to rebuild.”

RELATED: OPINION: Where Western NC stands a year after Hurricane Helene

Impact Health operates across 18 counties, coordinating with 60 local agencies to provide support like housing navigation, rent deposits, utility assistance, and mold remediation. These services became critical after the storm: helping families cover application fees, avoid unsafe housing, and stay afloat in rural communities where options are already scarce.

The cutbacks could also mean 300 layoffs among partner agencies by the end of this month, Stradley predicts, and ripple far beyond those who directly receive services. She warned that evictions will rise.

“We’ll see some folks who are housed lose housing because they were sort of in line for things like utility support and having your utilities shut off as a reason for being evicted,” Stradley said. “If you can’t keep those on, then your landlord can remove you. I think we will see more disrepair folks who are having referrals, or were eligible for referrals for things like mold mediation or leaky roof repairs. You’ll see those things just not happen and have people living in unsafe housing.

Conditions, she added, are likely to worsen as winter approaches. Without stable housing, shelters could face massive overcrowding.

“So I do worry that if we don’t get this back in place before the fall turns into the winter, we’re going to have more illnesses and injuries related to being stuck in the elements,” Stradley said. “And so we’ll have people end up in emergency care because they are unhoused, or they are in places that are not safe, and those are the direct health care costs.”

Doctors have backed this up. Children in unstable housing are 19% more likely to be hospitalized, and families often face long-term risks like asthma, learning loss, and depression, according to Dr. Stephanie Ettinger de Cuba, executive director of Children’s HealthWatch at Boston University. In an article with Business Record, she explained that homelessness is only the tip of the iceberg—even being behind on rent or moving frequently can have serious health consequences.

“We need to understand that while homelessness is very toxic and problematic, being behind on rent or moving a lot also affects the health, and mental health, of children and caregivers.” 

Policy analysis

Advocates say the dangers in WNC reflect a broader statewide imbalance. Stephanie Watkins-Cruz, director of housing policy at the North Carolina Housing Coalition said the trade-offs in the “big beautiful bill” reveal a dangerous imbalance. On one hand, the bill boosts the Low-Income Housing Tax Credit, which is the nation’s largest tool for producing and preserving affordable housing. But she warned that the same legislation strips away the very supports that allow people to stay housed.

WATCH: Video: When ‘affordable housing’ isn’t affordable for those who need it most

“At the Coalition, we look at addressing affordable housing, addressing this need from a four-pronged framework. We look at supply, subsidy, stability, and systems.”

She said while the bill strengthens supply, it undermines stability by cutting Medicaid. Those Medicaid-funded supports have been crucial in North Carolina, paying for eviction prevention, utility assistance, and even home repairs that keep people in safe housing.

Without those protections, families slide back into instability.

“If people don’t have housing that also impacts their health and their quality of life, when you look at sort of the hierarchy of needs: shelter, air, food is at the bottom—if folks need rental assistance, deposit assistance, or some sort of crisis assistance to even shelter them, and that goes away in addition to their health care or services that allows them to function healthily as an individual and unit, we start to see layers of generational impacts.”

State budget layer

The federal cuts aren’t the only threat to Medicaid in the state. Even before Republicans’ “big beautiful bill” passed, state lawmakers were deadlocked over how to fund the program. This week, the legislation’s session adjourned without approving enough money to cover the state’s share of Medicaid. Without a deal, state health officials warned they’d be forced to start cutting reimbursement rates to hospitals, nursing homes, and other providers as early as Oct. 1.

READ MORE: North Carolina will cut Medicaid rates in October, putting care at risk

North Carolina Department of Health and Human Services officials said the program needed $819 million this fiscal year, but lawmakers previously approved only $600 million. The House and Senate have floated similar fixes, like shifting funds within state agencies, but disagreed on tacking on unrelated projects like a new children’s hospital. No agreement will be reached before Oct. 20 at the earliest. 

RELATED: Huge Medicaid cuts loom after NC Republican leaders fail to reach funding deal

Democratic Gov. Josh Stein blasted the stalemate, warning that failure to act would cost North Carolina critical federal matching dollars and more than a billion dollars overall.

“With no agreement in sight to fully fund our Medicaid program, the General Assembly is closing off access to health care at a time when we need more,” Stein said in a statement. “They’re putting their politics ahead of our people. It’s inexcusable. I urge the legislature to set their differences aside and protect North Carolinians’ ability to access health care.”

Ripple effects

Taken together, federal and state-level cuts could dismantle the balance that has allowed Medicaid to serve as both a health care provider and housing stabilizer in North Carolina.

Watkins-Cruz said everyone will feel the cuts: shelters will be overwhelmed, rural hospitals will face new financial strain, landlords will lose tenants who can’t keep up with rent or utilities, and children could suffer in school. Even those not on Medicaid will feel the ripple effects in neighborhoods.

“Housing is health care and health care matters,” she said.

For the Haywood County family, Medicaid’s support meant the difference between unsafe housing and a new start. Advocates fear that without those protections, countless other North Carolina families will lose the same chance to rebuild.