Winter 2026 Issue

Navigating Funding Cuts to Mental Health Services
By Heather Rose Artushin, MSW, LISW-CP
Social Work Today
Vol. 26 No. 1 P. 26

2026 leaves social workers and their clients feeling the effects of last year’s major federal legislative changes, particularly when it comes to mental and behavioral health.

Medicaid and Affordable Care Act Cuts
Perhaps one of the most impactful policy changes of 2025 was the One Big Beautiful Bill Act (H.R.1) enacted on July 4, involving unprecedented cuts to federal health and social safety net programs. An estimated $1 trillion in funding cuts to Medicaid and the rollback of expanded Affordable Care Act subsidies are expected to result in tens of millions of Americans losing health care coverage over the course of the next decade. Medicaid is the largest payer of mental health services in the United States.

Included in this bill is the mandate that all states require Medicaid recipients to prove they are working in order to maintain coverage. While the bill provides an exemption from this work requirement for those who are “medically frail,” including individuals with a disabling mental health or substance use disorder, the requirement to satisfactorily document this status will likely affect coverage for many people who are struggling with their mental health.1

Hannah Wesolowski, chief advocacy officer for the National Alliance on Mental Illness (NAMI), leads NAMI’s government relations, policy, and advocacy initiatives. “Mental health conditions are not a consistent experience,” she shares. “You may be able to work one month, but not the next because symptoms are more pronounced. We want the widest exemption possible for people with mental illness. People want the dignity of work, but we shouldn’t be taking their health care away if they can’t.” She goes on to say, “Medicaid is one of the more efficient health care payers out there in terms of lower administrative costs compared with many other types of health insurance, and we’re putting a lot more strain on the system that’s supposed to be our safety net.”

The bill does exempt parents and caregivers for children ages 13 and younger; however, dependents over the age of 13 who have a parent struggling with mental health concerns may also be at risk of losing coverage if their parent is unable to work or to provide adequate documentation to avoid falling through the cracks.

Wesolowski notes that funding restrictions for mental and behavioral health are not just happening at the federal level—they are also impacting state-level budgets. “We’re seeing states tightening their belts,” she states. “They’re thinking about the repercussions of less Medicaid dollars coming, more demands on resources to pay for their share of Medicaid. Some of our NAMI branches who provide direct support to individuals are reporting that state grants for mental health are being restricted. We’re already seeing that money is tightening up to brace for some of the impact.”

SAMHSA Restructuring
In March 2025, the Substance Abuse and Mental Health Services Administration (SAMHSA) was combined with other agencies under the new Administration for a Healthy America (AHA) in order to save money and streamline resources, according to the Department of Health and Human Services (HHS).2 Over 100 employees were laid off from SAMHSA in April, including an entire team overseeing the only national survey focused specifically on drug use and mental health that had been in use since 1971.3 Historically SAMHSA has played an integral role in supporting state and local mental health services, and providing grant funding for research in order to advance mental health and substance use treatment and prevention.

“SAMHSA is the only federal agency dedicated to making sure the needs of people with mental illness and substance use conditions are addressed,” Wesolowski explains. “We fought for a long time to have an agency focused on this issue, and we are concerned that merging with lots of subagencies will reduce that focus. We estimate that over half of SAMHSA’s staff has been eliminated in total, and it was already a lean agency with only 900 staff at the beginning of 2025. Mental health is an issue that affects over 80 million adults in this country. When you add to that some of the funding cutbacks that have happened this year, it is putting a lot of pressure on states and impacting some of the mental health services on the ground. People are scared right now and worried if they’re going to lose coverage. It is creating a lot of anxiety.”

SAMHSA has also eliminated the “Press 3” option from the 988 Suicide and Crisis Lifeline, which provided specialized care for LGBTQ+ youth. While SAMHSA representatives cite operation costs as the reasoning behind this change, LGBTQ+ advocacy groups posit that without expertise in the unique challenges faced by LGBTQ+ people, services may be less effective in saving lives within this vulnerable population.3

Research Grant Funding Cuts
In addition to funding cuts to direct services for people struggling with mental health and substance use issues, recent legislation has also significantly impacted grant-funded research efforts in these areas. Research focused on LGBTQ+ communities as well as diversity, equity, and inclusion (DEI) has been specifically targeted as not aligning with the administration’s priorities. According to the JAMA Network, most active research grants that were abruptly terminated came from the National Institute of Mental Health.4

Katie Edwards, PhD, a professor in the School of Social Work at the University of Michigan and director of the Interpersonal Violence Research Laboratory (IVRL), is dedicated to community-led research to prevent and respond to sexual and related forms of violence among populations who are most vulnerable. “In my lab, we had 10 federal grants cut, including eight National Institutes of Health (NIH) grants,” she shares. “These grants focused on communities of color and LGBTQ+ youth. Cutting funding for this research will not only freeze cutting-edge science but literally cost the lives of some of the most vulnerable youth in this country.”

Edwards’ IVRL staff of more than 50 members were at risk of losing their jobs. After joining a class action lawsuit that the ACLU and Protect Democracy were leading, Edwards and her team successfully sued the HHS and NIH and their grant funding was restored—for now. “Our grants are still at risk of being terminated again,” she explains. “However, I will keep fighting. I will never stop fighting for my staff, for the communities I have the honor of serving through our research.”

Department of Justice Cuts
In April 2025, the Department of Justice (DOJ) eliminated an estimated $500 million in grant funding for substance use treatment, mental health services, and programs that bring together law enforcement and health professionals to prevent cycles of behavioral health crises, arrests, and incarceration. Most grant recipients included nonprofit organizations, state and local government agencies across the country, supporting victims’ services, juvenile justice and child protection, substance use and mental health treatment, justice system enhancements, reentry programs, research and evaluation, and more.5

These DOJ funding cuts add another layer to the deconstruction of mental and behavioral health supports across the country, this time within the criminal justice system. It is uncertain how DOJ funding cuts might impact incarceration and recidivism rates in the long-term.

Department of Education
A March 2025 executive order called for disbanding the Department of Education (DOE), which has played an important role in ensuring equal access to education, distributing federal funds to support Title I school districts, meal programs, and Pell Grants for college students, ensuring schools comply with civil rights laws, and upholding educational standards since 1979.6 DOE has also been integral in implementing the Individuals with Disabilities Education Act, overseeing special education services that ensure a free and appropriate education for students with unique challenges, including those with mental health concerns.

“One of the really important things the DOE has done is set standards and ensure that the needs of students with disabilities and additional learning needs are addressed in an evidence-based way consistently across the country,” Weselowski says. “Many of the funding cuts have put that at risk.”

In May 2025, the DOE discontinued $1 billion in grants aimed at improving mental health services in schools across the country. Originally allocated under President Joe Biden’s Bipartisan Safer Communities Act, an antigun violence law enacted after the mass school shooting in Uvalde, Texas, many grant recipients are now facing uncertainties regarding how to afford school mental health professionals, including school social workers. “This is something else that I think is really pertinent to social workers,” Wesolowski urges. “The 2022 Bipartisan Safer Communities Act helped create the school mental health professional pipeline to train school mental health professionals and help districts afford to hire them. In 2025, the DOE eliminated that funding. Some of it has been restored partly due to a court order, but that puts states and communities in a really uncertain environment. They are unsure if that funding will be available in the future, or if they will be put in a position to have to pay any of that money back as the court case unfolds.”

Wesolowski believes early intervention and mental health are bipartisan issues that many politicians and voters agree upon, on both sides of the aisle. “The ratio of school mental health professionals to students is nowhere near the recommendations,” she says. “We have a huge need for school mental health professionals.”

Higher Education Legislation Impacting Social Workers
Recent legislation has also impacted access to training programs for mental and behavioral health professionals, including social workers. The One Big Beautiful Bill Act included a reduction in federal support for higher education by an estimated $300 billion, most of which falls on graduate and professional education. The bill calls for significant reductions to federal student loan borrowing for graduate students, the only means of federal financial support for graduate study.

The One Big Beautiful Bill Act’s cuts to Medicaid as well as its reduction of federal financial aid availability to MSW students is likely to have a significant impact on the future of the social work profession, and, ultimately, the availability of mental health care in the United States.1 Clinical social workers are recognized as the nation’s largest group of mental health service providers, outnumbering other disciplines including psychologists and marriage and family therapists.7

A change in what is considered a professional degree took place in November 2025, declassifying social work degrees, in addition to counseling and other mental health disciplines, further reducing access to federal student loans for social work students, and increasing reliance on high-interest private loans. Barring students from gaining access to the federal financial aid necessary to cover the costs of their degree may have lasting impacts on the social work professional workforce, ultimately exacerbating an already-growing mental health provider shortage.8,9

Social Work Impact and Action
While social work students pursuing graduate degrees are facing new challenges in funding their education, social work professionals already working in the field are likely to begin noticing the effects of these sweeping legislative changes related to mental and behavioral health funding. “There is a lot of potential impact on social work and other mental health professionals,” Wesolowski explains. “States have to make tough decisions on where to fill Medicaid funding gaps, and some will look at reimbursement rates, which are already dangerously low for mental health providers. Lower reimbursement rates for services have an impact on the social work profession at large.”

NAMI notes a significant increase in calls, outreach for support groups, and a need for mental health care in 2025, and expects the demand to continue to rise. “Whether you are working in a school seeing more families struggling and its impact on children, or as a clinical social worker seeing clients worried about paying the bills, presenting with an increase in depression and anxiety, worried about the state of the world, concerned about losing health care and other benefits, it’s going to put a huge strain on the mental health system and its providers,” Wesolowski says.

Edwards’ reports that social work students are also experiencing an increase in anxiety about what the future of social work may look like. “Things feel really uncertain right now, but we need social workers more now than ever!” she exclaims.

Social workers can lead advocacy efforts at all levels of government to ensure funding is restored for mental and behavioral health services, research, and professional training. In much the same way, NAMI continues to advocate for the needs of people living with mental illness. “We try to be vocal about how this will impact people with mental illness,” Wesolowski says. “We don’t generally go into a congressional office, no matter the side of the aisle, without  their interest in addressing this. Mental illness doesn’t have a party affiliation—it affects all of us. It’s hard to find a family that doesn’t include someone impacted by a mental health condition or suicide. It is incumbent on us to let policy makers know how legislation is impacting people back home in their district, the people they represent.”

Social workers are uniquely positioned to amplify the voices of the communities they serve, to inform policy makers of pathways toward more support for mental and behavioral health care in the United States. “I hope social workers continue to speak up,” Wesolowski urges, “to educate the people they work with about what’s happening, and to partner with organizations and other people, because we’re stronger together.”

— Heather Rose Artushin, MSW, LISW-CP, is a writer with over a decade of published experience and a passion for social justice.

References
1. Massive tax bill impacting behavioral health now law. American Psychological Association website. https://www.apaservices.org/advocacy/news/tax-bill-impacting-behavioral-health. Published 2025. Accessed January 21, 2026.

2. HHS Announces transformation to make America healthy again. United States Department of Health and Human Services website. https://www.hhs.gov/press-room/hhs-restructuring-doge.html. Published March 27, 2025. Accessed January 21, 2026.

3. Oppenheim O, Chang E. Experts concerned over Trump admin cuts to mental health programs. ABC News website. https://abcnews.go.com/Politics/experts-concerned-trump-admin-cuts-mental-health-programs/story?id=125372658. Published September 9, 2025. Accessed January 21, 2026.

4. Liu M, Kadakia KT, Patel VR, Krumholz HM. Characterization of research grant terminations at the National Institutes of Health. JAMA. 2025;334(6):534-536.

5. Solomon A, Pearl B. DOJ funding update: a deeper look at the cuts. Council on Criminal Justice website. https://counciloncj.org/doj-funding-update-a-deeper-look-at-the-cuts/. Published May 8, 2025. Accessed January 21,2026.

6. Binkley C. Trump says Education Department will shed student loans, special education. AP News website. https://apnews.com/article/education-department-shut-down-mcmahon-37e3eceb8f7ae93e488ea33f8d970786. Published March 21, 2025. Accessed January 21, 2026.

7. About social workers. National Association of Social Workers website. https://www.socialworkers.org/news/facts/social-workers. Updated 2016. Accessed January 21, 2026.

8. McNair K. Students pursuing these 11 degrees will be eligible to take out up to $200,000 in federal loans under new borrowing limits. CNBC website. https://www.cnbc.com/2025/11/26/criteria-to-be-considered-professional-degrees.html?msockid=35e3e47fd746617d1c5bf2dad658604f. Published November 26, 2025. Accessed January 21, 2026.

9. State of the Behavioral Health Workforce, 2024 [Review of State of the Behavioral Health Workforce, 2024]. HRSA Bureau of Health Workforce website. https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/state-of-the-behavioral-health-workforce-report-2024.pdf. Published November 2024.