As Congress works through this year’s federal budget, one topic is drawing more attention: Medicaid. While it might not always make the headlines, decisions about how this program is funded could have a lasting impact on how people across the country access mental health and substance use services.
Medicaid plays a major role in the nation’s behavioral health system. It’s the single largest payer for mental health and substance use disorder care in the United States. More than 44 million people use Medicaid to get the support they need, including over one in four adults living with serious mental illness and one in three adults with an opioid use disorder (Center on Budget and Policy Priorities [CBPP], 2025).
For children, the numbers are even higher. Medicaid and the Children’s Health Insurance Program (CHIP) cover 54 percent of all children in the country, and nearly three out of four children with mental health conditions rely on these programs to receive care.
This support reaches into all corners of the system. Medicaid helps fund community clinics, outpatient programs, medication, inpatient care, and mental health services in schools. In fact, more than 70 percent of school-based health centers depend on Medicaid funding. Almost half of school-age children who get mental health care do so at school, and many of them are covered by Medicaid (CBPP, 2025).
Right now, lawmakers are considering whether to change how Medicaid is funded. Some of the ideas being discussed include shifting to block grants or setting per-person spending caps. These changes would set annual limits on how much the federal government contributes to state Medicaid programs. Supporters say this approach could make spending more predictable and give states more flexibility to tailor their programs.
Others worry that, over time, this might lead to fewer resources, especially during tough economic times or health emergencies, when demand is high and costs often rise. There’s some precedent for concern. In earlier budget crunches, several states had to scale back behavioral health services.
This meant fewer psychiatric hospital beds, reduced outpatient services, and cuts to school-based programs. That said, not every state responded the same way. Some were able to create targeted programs or maintain access by adapting their resources creatively.
What we do know is that the need for mental health services remains strong. About one in five U.S. adults lives with a mental illness. Suicide is now the second leading cause of death for children ages 10 to 14. In 2021, nearly 40 percent of adults reported experiencing anxiety or depression, and those levels have stayed high in the years since the COVID-19 pandemic began (CBPP, 2025). These trends suggest that the demand for care is unlikely to decrease.
In states that expanded Medicaid under the Affordable Care Act, coverage improved significantly for people with behavioral health needs. In fact, the uninsured rate among this group dropped by almost half. Medicaid also funds mobile crisis teams, peer support specialists, and other community-based services that are often more effective and less expensive than hospital or emergency care (CBPP, 2025).
As the debate continues, it brings up some important questions. How do we balance budget goals with the realities of public health? What role should the federal government play in making sure people have access to care? And how can we plan for future needs when both costs and demand are so unpredictable?
There aren’t easy answers to any of these questions. What is clear is that Medicaid plays a central role in helping people access mental health and substance use care. Any changes to the program are likely to have real effects on the ground, particularly for people who are already navigating complex or ongoing challenges.
In moments like these, staying informed matters. If mental health is an issue that touches your life, your work, or your community, this is a time to pay closer attention, ask thoughtful questions, and follow how this conversation unfolds. Even quiet policy shifts can ripple widely—and being aware is often the first step toward meaningful engagement.
Two actions can help make a difference. One is to spend a few minutes learning how Medicaid works in your state—whether through your state’s health department website or a trusted local resource—just enough to understand who it helps and how it connects to care in your community.
Another is to reach out, whether by writing a note to a local policymaker or checking in with a community organization you trust, to ask how Medicaid policy is shaping care in your area.
Even as other issues take the spotlight, the conversation about Medicaid continues—with potential far-reaching impacts. Behind each decision are everyday moments—children learning, families managing, communities doing their best with what they have. Paying attention to how care is supported, and to the people it reaches, is a small but meaningful way to stay connected. Sometimes, awareness itself is a kind of care.
Reference
Center on Budget and Policy Priorities. (2025, May). On the chopping block: How Medicaid cuts will impact mental health. https://www.cbpp.org/research/health/on-the-chopping-block-how-medicaid-cuts-will-impact-mental-health