Federal policies threaten to reduce access to mental health care and substance use services

Federal actions and budget proposals threaten widespread reductions in U.S. mental health care access. In May 2025, the administration declined to enforce 2024 mental health parity rules following employer legal challenges. Additionally, the H.R. 1 bill cut $1 trillion from Medicaid over 10 years, risking coverage for 14.9 million individuals. Proposed FY26 budget measures would dissolve SAMHSA and HRSA into a consolidated agency, reducing program funding by $1 billion alongside cuts to 988 lifeline services.

SAMHSA grant termination and reinstatement

• ▪On January 13, 2026, the Substance Abuse and Mental Health Services Administration terminated hundreds of grants totaling approximately $2 billion for mental health and substance use disorder services.
• ▪The Substance Abuse and Mental Health Services Administration reinstated $2 billion in mental health and substance use grants on January 14, 2026, following bipartisan pushback.

Medicaid cuts under H.R. 1

• ▪The Congressional Budget Office estimated that H.R. 1 Medicaid cuts would cause 11.8 million people to lose direct Medicaid coverage and 3.1 million to lose marketplace plan coverage.
• ▪Passed on July 4, 2025, the One Big Beautiful Bill Act (H.R. 1) reduced federal Medicaid spending by 15 percent, or $1 trillion, over 10 years.

Challenges to mental health parity rules

• ▪On May 12, 2025, the federal administration announced it would not enforce September 2024 Biden-era mental health parity regulations for insurance providers.
• ▪The ERISA Industry Committee legally challenged the September 2024 mental health parity rules, claiming the regulations overstepped administrative authority and raised costs.

Proposed FY26 health agency restructuring

• ▪The President's FY26 budget proposed dissolving the Substance Abuse and Mental Health Services Administration and the Health Resources and Services Administration to consolidate them into a new Administration for a Healthy America.
• ▪Proposed FY26 restructuring threatens Health Resources and Services Administration programs that support mental health professional training and health delivery in underserved communities.
• ▪The proposed FY26 budget restructuring includes a $1 billion funding reduction affecting community mental health centers, suicide prevention, and substance use treatment programs.