The Department of Health & Human Services (DHHS) budget was $4.6 billion for FY2008 and $5.1 billion for FY2009. The DHHS budget thus increased by some $400 million over the previous fiscal year Health & Human Services budget of $4.2 billion. The DHHS budget also created 198 new positions. After years of wrangling over who is responsible for paying for state and federal unfunded mandates, the state agreed to take over the county share of Medicaid payments. The state also took significant steps toward the implementation of a universal healthcare system by passing a taxpayer-funded health insurance high-risk pool, as well as a program that extends state-funded insurance to children from families who earn as much as $60,000. Other healthcare highlights include the defeat of a public smoking ban, the repeal of a chiropractic provision pushed into law by then-Speaker Jim Black (D-Mecklenburg), the passage of a mental health coverage mandate, and the defeat of a needle exchange program. Possibly foreshadowing future trends in children’s health, legislators also introduced, but did not pass, several bills related to immunization and children’s nutrition/obesity. Perhaps most important is that even as the state took on a greater share of Medicaid funding, legislators failed to address the state’s skyrocketing Medicaid costs. In this regard, Senator Robert Pittenger’s (R-Mecklenburg) bill to allow Medicaid recipients to use private managed care plans (HMOs) to obtain Medicaid coverage is worthy of note.