White House Budget Proposes to ‘Transform Mental Healthcare,’ Allocates $4.8B to Related Initiatives

The Biden administration’s new federal budget proposal for the next fiscal year includes $4.77 billion to “transform mental health and substance use disorder coverage and infrastructure” in the country.

On Monday, the White House released the budget for the federal fiscal year 2023, which begins on Oct. 1. The roughly $5.8 trillion budget seeks to encapsulate several priorities including the so-called “Unity Agenda” outlined in Biden’s State of the Union address at the beginning of the month.

The White House budget is seen largely as a symbolic document, given the long congressional process that ensues before a final budget is enacted. So, while the specific policies in the Biden budget might not be realized, the document does signal the administration’s large ambitions related to behavioral health.


In the State of the Union, Biden outlined his administration’s intent to tackle four points as part of the Unity Agenda — beat the opioid epidemic, address mental health (especially among youth), support American veterans suffering following exposure to burn pits and create the Advanced Research Projects Agency for Health.

“Mental health is essential to overall health, and the United States faces a mental health crisis that has been exacerbated by the COVID-19 pandemic,” the budget proposal released by the Office of Management and Budget (OMB) states. “To address this crisis, the Budget proposes reforms to health coverage and major investments in the mental health workforce.”

The budget details $275 million over the next 10 years for the U.S. Labor Department (DOL) to better enforce the Mental Health Parity and Addiction Equity Act (MHPAEA) against large group health plans that don’t comply with the law.


In part, MHPAEA forbids health plans from treating behavioral health benefits — such as coverage of mental health or substance use disorder treatment — differently than physical health benefits. Some in the behavioral health space point to the lack of parity enforcement as a key reason why behavioral health isn’t more accessible. 

“The budget requires all health plans to cover mental health benefits, ensures that plans have an adequate network of behavioral health providers, and improves DOL’s ability to enforce the law,” the OMB budget proposal states.

In January, the U.S. Labor Department, Department of Health and Human Services and Department of the Treasury issued a 54-page report spelling out how group health plans or health insurance issuers have fallen short of their legal obligations to ensure parity. That has been used as an impetus for congressional Democrats to take action on the issue.

Lobbyists and advocates aligned with the U.S. insurance industry are trying to get ahead of the efforts by congressional Democrats to draft and build bipartisan support for two major proposals around parity, according to a report by Politico.

The Biden White House has apparently internalized calls for better parity enforcement, much to the delight of advocates in the space. Several groups applauded the tough talk around parity and improving the mental health of the country in Biden’s State of the Union address.

The budget would also include language to apply MHPAEA to Medicare — which it presently does not. 

“Every President’s budget proposal must advance through the Congressional budget process. This takes months and a great deal of negotiation,” Mark Dunn, the public policy director for the National Association of Addiction Treatment Providers, said in a statement. “These proposals do however signal the Administration’s priorities and how they may direct future resources once appropriated.”

Budget documents show that the two specific initiatives will account for $3.08 billion, or about 65%, of the portion budget that OMB identifies as going to mental health and substance use disorder spending. About $1.88 billion will go to “improve access to behavioral healthcare in the private insurance market” and about $1.2 billion will go to “require coverage of three behavioral health visits and three primary care visits without cost-sharing.” The OMB report says that these two items are cross-cutting proposals that will involve several agencies.

The next biggest funding items are:

  • $750 million to invest in the behavioral health workforce and delivery
  • $500 million performance bonus fund for Medicaid programs to improve behavioral health in the next five years

Outside of the current budget year, the Biden administration has plans for the role of public health care entities in addressing U.S. health care issues.

In fiscal 2024, the OMB budget proposal calls for more than doubling new permanent funding for Community Mental Health Centers (CMHCs) from fiscal 2023’s $124 million to $289 million and increasing that amount in fiscal 2025 to $372 million. From fiscal years 2026 to 2032, the budget proposes $413 million in funding for CMHCs.

The budget also calls for a six-year funding program to “establish Medicaid provider capacity grants for mental health & substance use disorder treatment” that would total $7.5 billion, lasting from fiscal years 2023 to 2028.

Also for Medicaid, it would establish $7.5 billion to go toward expanding and making permanent demonstration programs that improve community behavioral health services over the next 10 fiscal years.

Medicaid is the single largest payer of mental health services in the United States.

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