Mental and Behavioral Health
Last Updated: April 7, 2025
$11.4 billion in COVID-era mental health and addiction grants canceled.
Grants for rural mental health training on hold.
School-based mental health programs reduced during agency reorganization.
Grants being cut or changed
Significant federal support for mental health services is being rolled back. The administration announced cancellation of roughly $11.4 billion in grants linked to mental health and addiction programs that were funded during the COVID-19 era. These grants had been scheduled to run through September 2025 to expand community mental health and substance use treatment. Now, the funding is being “clawed back” mid-stream, meaning clinics and state health departments have suddenly lost expected dollars.
Restructuring/eliminations
The Department of Health and Human Services (HHS) is undergoing a major reorganization. The Substance Abuse and Mental Health Services Administration (SAMHSA), which oversees mental health and substance abuse grants, is being merged into a new “Administration for a Healthy America (AHA),” and the plan is to eliminate about 20,000 HHS employees. This could disrupt ongoing programs like school-based mental health grants or technical assistance to community clinics. Some specialized grants – for instance, training for mental health professionals in rural areas – are on hold pending the agency shuffle.
On hold or court challenges
A coalition of 24 states sued to stop the $11 billion health funding cut. In early April, a federal judge issued a temporary injunction blocking HHS from implementing those cuts. The judge agreed that states had built programs with this money and would be harmed if it vanished overnight. This means some mental health and addiction grant funding might continue at least until the case is resolved. However, HHS has not reinstated them yet.
Timeline
The grant cancellations were announced in March 2025 and meant to take effect immediately, with HHS ordering an immediate freeze on remaining funds. The court’s temporary block came on April 3, 2025. If the courts ultimately side with the administration, clinics might see funding dry up later in 2025. Separately, the HHS reorganization will roll out over 2025. By 2026, states could be dealing with a very different system for receiving mental health funds.
State-level impact
State mental health departments in places like Ohio and Pennsylvania rely on federal block grants to fund local treatment programs. Kentucky, West Virginia, and Tennessee have high needs and already-strained mental health systems; losing federal dollars could mean longer waitlists for therapy, reduced mobile crisis teams, or even closure of some community clinics. South Carolina’s Department of Mental Health used federal grants to expand tele-mental health during the pandemic – those expansions are now in jeopardy without continued funds.
Sources
NPR. (2025, March 5). Biden-era mental health grants canceled by HHS. https://www.npr.org/2025/03/05/hhs-cancels-mental-health-grants
Reuters. (2025, March 10). States sue over $11 billion in public health cuts. https://www.reuters.com/legal/government/states-lawsuit-hhs-grant-cuts-2025-03-10
Associated Press. (2025, April 3). Judge halts HHS funding clawback for now. https://apnews.com/article/judge-halts-hhs-grant-freeze-april-2025
Department of Health and Human Services. (2025, March 2). AHA reorganization memo. https://www.hhs.gov/news/2025/hhs-announces-aha-structure.html
