New Policies Affecting Access to Mental Health Care

May 21, 2025

Background

Several policies that could substantially reduce access to mental health care and substance use disorder services, at a time when Americans are experiencing unprecedented mental health challenges, are being implemented or proposed. These actions span multiple federal agencies and affect various aspects of the mental health care system, from insurance coverage to agency funding to specialized services for vulnerable populations.

The federal-state Medicaid program accounts for one quarter of all U.S. spending on mental health and substance use disorder treatment services. Despite its critical role, the House of Representatives is voting on budget legislation that would cut $715 billion in federal Medicaid spending. These cuts, combined with other legislation in the program would result in almost 14 million people losing their health insurance. Because states are not required to cover behavioral health services in their Medicaid programs, major cuts in federal support would inevitably result in loss of access to care and would have significant ripple effects throughout the rest of the health care system. 

On May 12, 2025, the administration announced that it will not enforce Biden-era mental health parity regulations that strengthened requirements for insurers to provide equivalent coverage for mental and physical health conditions. These regulations, finalized in September 2024, were set to take effect starting on January 1, 2025, but faced a legal challenge from the ERISA Industry Committee (ERIC), representing large employers who claimed the rules overstepped administrative authority and would increase costs. If enforced, the regulations would have strengthened protections by requiring insurers to provide "meaningful benefits" for covered mental health conditions based on independent medical standards and take corrective action if required outcomes data showed that insurer practices created less access for mental health care. 

The Department of Health and Human Services has proposed restructuring federal mental health agencies and reducing their funding in the President’s FY26 budget. This includes dissolving the Substance Abuse and Mental Health Services Administration (SAMHSA) and the Health Resources and Services Administration (HRSA), consolidating them into a new Administration for a Healthy America (AHA). SAMHSA currently provides critical funding for community mental health centers, suicide prevention programs, and substance use treatment initiatives, while HRSA supports the training of mental health professionals and delivers services to underserved communities. The proposed restructuring includes a $1 billion cut to these programs, putting essential services for millions of Americans with mental health and substance use disorders at risk. Congress would need to approve the proposed restructuring and funding changes for them to go into effect. 

Additional federal actions impacting access to mental health care include reduced funding for LGBTQ+ crisis services through the 988 Suicide & Crisis Lifeline; the halting of $1 billion in school mental health professional grants by the Department of Education, citing civil rights concerns; and return-to-office mandates for VA mental health providers, which have compromised confidential care delivery in facilities lacking adequate private spaces.

APA/APASI Assessment

APA/APASI is deeply concerned about federal actions that restrict access to mental health care, particularly as these emerge amid escalating nationwide mental health needs. Our assessment highlights several critical areas of concern:

• Disinvestment in health care services: Cutting hundreds of billions of dollars in federal health care spending for Medicaid will take health insurance away for millions of Americans, going backward after years of effort to extend coverage more broadly. Medicaid cuts will disproportionately damage access to behavioral health services, since Medicaid beneficiaries are likelier to experience behavioral health disorders than those with private health insurance or without health insurance, and since the program pays for a quarter of behavioral health spending.
• Barriers to care: Policies that limit accessible, affordable mental health services create significant barriers to essential care. Insurance restrictions, funding cuts, and program eliminations disproportionately affect vulnerable populations, including those with serious mental illness, substance use disorders, and marginalized communities who already face significant hurdles to receiving care.
• Disruption of established service systems: Proposed agency restructuring threatens specialized programs and expertise developed over decades to address complex mental health challenges across diverse populations. These disruptions risk fragmenting the mental health care ecosystem at a time when demand continues to increase.
• Reduction in access points to care: Reducing services through the 988 Suicide & Crisis Lifeline and public schools decreases opportunities to intervene in the most timely and available fashion, increasing risks of more serious outcomes, delay in recognizing need and lost opportunities for prevention and early intervention which then leads to later more intensive and expensive services.

The cumulative effect of these actions is a concerning deprioritization of mental health and health care infrastructure and support systems at a time when they are critically needed. APA is particularly concerned about how these policies will affect those with the greatest needs and fewest resources.

APA’s Position

APA unequivocally advocates for federal and state policies that ensure and expand equitable access to comprehensive mental health care for all. We strongly oppose recent and proposed actions that erect barriers to essential services, especially when national mental health needs are at an unprecedented high.

View APA’s joint statement objecting to the administration’s announcement on mental health parity.

View APA Services’ recent testimony urging Congress to support programs that promote psychological science and workforce development and expand mental and behavioral health services for fiscal year (FY) 2026.

What Psychologists Can Do

Psychologists can take action to mitigate the impact of policies that restrict mental health care access:

• Stay informed about policy developments through APA communications and use this knowledge to inform patients about their rights and options under changing regulations.
• Document access barriers encountered in practice, including insurance denials, coverage limitations, and confidentiality challenges, as this evidence supports broader advocacy efforts.
• Explore alternative service delivery models that maximize accessibility within current constraints, including telehealth options, sliding-scale services, and community-based approaches.
• Educate communities and policymakers about the importance of mental health care access and the real-world impacts of restrictive policies on patient outcomes.
• Collaborate across disciplines with other healthcare providers, community organizations, and advocacy groups to develop coordinated responses to access challenges.
• Engage in informed professional advocacy by connecting and collaborating with APA/APASI, your state, provincial, or territorial psychological association, and other relevant professional and community organizations. 
  

What the Science Says

Research consistently demonstrates that barriers to mental health care access result in significant negative consequences for individuals, communities, and the economy (e.g., Knapp, 2003). Research indicates that two-thirds to three-quarters of people identified as meeting criteria for a mental health disorder reported not receiving treatment, highlighting a significant gap between need and service utilization (Aoun et al., 2004). 

Research indicates that life circumstances, including socioeconomic disadvantage, ethnic and racial discrimination, and inequalities faced by the LGBTQ community, are inextricably linked to an individual’s risk of developing mental health challenges (e.g., Jiménez-Solomon et al., 2024; Pascoe & Smart Richman, 2009). One way these systematic inequalities can be addressed is through policy interventions that support parity in mental health care, including for primary prevention, particularly for vulnerable populations (Kirkbride et al., 2024).

Contrary to concerns about provider shortages driving access issues, recent research indicates that insurance reimbursement disparities represent a significant barrier to access and great financial burden for mental health patients. A study by RTI International found that insurance reimbursements for behavioral health visits are on average 22% lower than for medical or surgical office visits, creating a disincentive for providers to join insurance networks and increasing the cost of mental health care for patients (Mark & Parish, 2024). This burden may lead to patients going without treatment, which can increase the overall cost of mental illness to individuals and society. In fact, research by Coombs et al. (2021) found significant barriers to healthcare access among adults with mental health challenges, with those experiencing moderate to severe psychological distress significantly more likely to report unmet healthcare needs due to cost. 

The RTI Report also found enormous disparities in patient access to behavioral health care among commercial insurance networks, particularly with respect to psychologists. Examining a key indicator of network inadequacy, the RTI report found that psychologists’ patients were 10.6 times more likely to be forced to find care out-of-network (OON) than the patients of specialty physicians. Similarly, psychologists’ patients were forced to use OON services over 8 times more frequently than patients of primary care physicians, even though primary care physicians are in shorter supply.

Untreated mental illness has impacts beyond the individuals directly affected. A recent cross-sectional study found that untreated mental illness cost Indiana $4.2 billion in direct, indirect, and societal costs—approximately one percent of the state’s gross domestic product (Taylor et al., 2023). 

Together, this scientific foundation demonstrates that policies restricting mental health care access are likely to increase mental health burdens, healthcare costs, and societal impacts while failing to achieve stated policy objectives. The evidence strongly indicates that full mental health parity implementation leads to improved health outcomes without significantly increasing overall healthcare costs.

References

Aoun, S., Pennebaker, D., & Wood, C. (2004). Assessing population need for mental health care: a review of approaches and predictors. Mental Health Services Research, 6(1), 33–46. https://doi.org/10.1023/b:mhsr.0000011255.10887.59

Coombs, N. C., Meriwether, W. E., Caringi, J., & Newcomer, S. R. (2021). Barriers to healthcare access among U.S. adults with mental health challenges: A population-based study. SSM - Population Health, 15, 100847. https://doi.org/10.1016/j.ssmph.2021.100847

Jiménez-Solomon, O., Garfinkel, I., Wall, M., & Wimer, C. (2024). When money and mental health problems pile up: The reciprocal relationship between income and psychological distress. SSM - Population Health, 25, 101624. https://doi.org/10.1016/j.ssmph.2024.101624

Kirkbride, J. B., Anglin, D. M., Colman, I., Dykshoorn, J., Jones, P. B., Patalay, P., Pitman, A., Soneson, E., Steare, T., & Wright, L. (2024). The social determinants of mental health and disorder: Evidence, prevention and recommendations. World Psychiatry, 23(1), 58-90. https://doi.org/10.1002/wps.21160

Knapp, M. (2003). Hidden costs of mental illness. The British Journal of Psychiatry, 183(6), 477–478. https://doi.org/10.1192/bjp.183.6.477

Mark, T. L., & Parish, W. J. (2024). Behavioral health parity – Pervasive disparities in access to in-network care continue. RTI International.

Pascoe, E. A., & Smart Richman, L. (2009). Perceived discrimination and health: A meta-analytic review. Psychological Bulletin, 135(4), 531–554. https://doi.org/10.1037/a0016059https://doi.org/10.1037/a0016059

Taylor, H. L., Menachemi, N., Gilbert, A., Chaudhary, J., & Blackburn, J. (2023). Economic burden associated with untreated mental illness in Indiana. JAMA health forum, 4(10), e233535. https://doi.org/10.1001/jamahealthforum.2023.3535