Behavioral health is in the political crosshairs. This series tracks the Trump administration’s proposed policy changes, funding cuts and structural overhauls that could reshape behavioral health care in the U.S. From HHS reorganizations to Medicaid shifts, we’re following what matters — and what’s at stake — for providers, payers and investors. (Last update: April 17, 2025)
Office on Smoking and Health shuttered
The Centers for Disease Control will be closing the Office on Smoking and Health, according to STAT News.
The department responsible for tobacco use prevention campaigns and collecting national data around smoking trends officially closed on April 1. The closure impacted around 120 employees, according to STAT.
The closure of the office has sparked backlash from industry groups, who say the move could mean an uptick in youth smoking.
“It is inexplicable and especially harmful that these cuts are coming at a time when the FDA should be redoubling its enforcement efforts against the many illegal, flavored e-cigarette products that have entered our country from overseas and put kids at risk,” Yolonda Richardson, president and CEO, Campaign for Tobacco-Free Kids, said in a statement. “These cuts will make it easier for unscrupulous companies to continue targeting our kids with illegal, flavored and highly addictive e-cigarettes. Furthermore, cuts to the FDA’s Center for Tobacco Products will not save taxpayers money as the center is funded with user fees paid by the tobacco industry.”
Industry groups pushback on HHS cuts
National, state and local health organizations are pushing back on the Trump administration’s recent announcement of cuts at the U.S. Department of Health and Human Services and The Substance Abuse and Mental Health Services Administration (SAMHSA).
The organizations say that restructuring HHS would weaken the infrastructure of substance use and mental health services in the country.
“Recent action to rescind $1 billion in appropriated SAMHSA funds slated for critical activities to stem the overdose crisis and the reported 50% reduction in the agency’s workforce threatens the vital infrastructure that supports substance use prevention, treatment and recovery, overdose prevention and other harm reduction strategies, as well as mental health services and supports throughout the country,” the statement says.
The statement argues that federal funding cuts and staff reductions will eventually trickle down to states and local community services and impact millions of at-risk individuals.
Medicaid cuts loom
Congress passed its revised budget resolution, which directs the House Energy and Commerce Committee — which oversees Medicare and Medicaid spending — to cut spending by $880 billion over the next decade.
Likely the bulk of the cuts will come from the Medicaid budget. Cuts to Medicaid could have a significant impact on behavioral health services, especially autism and substance use disorder services.
“Medicaid cuts could have a crippling effect on behavioral health services. Behavioral health services currently already have limited resources and funding, any additional cuts would make things even more challenging,” Dr. Imamu Tomlinson, CEO of Vituity, previously told Behavioral Health Business. “This is especially true for patients at the lower end of the socioeconomic spectrum who depend on behavioral health safety nets.”
April 3, 2025
HHS layoffs begin
On April 1, employees throughout the sprawling U.S. Department of Health and Human Services were informed that their positions were being cut. The news was part of the major restructuring effort aimed at significantly reducing the size of the agencies tasked with safeguarding and advancing public health in the United States.
The layoffs span a wide range of roles, including doctors, scientists, researchers, administrative personnel and high-ranking officials.
Related to the cuts, lawmakers that lead the Senate’s Health, Education, Labor and Pensions Committee have called on HHS Secretary Robert F. Kennedy, Jr., to testify at an April 10 hearing to explain the department’s reorganization.
Director of the National Survey on Drug Use and Health impacted by HHS cuts
Among those impacted by the HHS workforce reduction was Jennifer Hoenig, director of the National Survey on Drug Use and Health (NSDUH), according to The Hill.
Hoenig expressed that she and her whole team at the Substance Abuse and Mental Health Services Administration (SAMHSA) had been let go.
NSDUH is an annual survey conducted in the United States that provides essential data on the use of tobacco, alcohol, illicit drugs and mental health in the civilian, non-institutionalized population aged 12 and older.
States sue Trump administration for funding cuts
A coalition of officials from roughly two dozen states – among them New York Attorney General Letitia James, Colorado Attorney General Phil Weiser, Kentucky Governor Andy Beshear, Pennsylvania Governor Josh Shapiro and leaders from the District of Columbia – have filed a federal lawsuit against the Trump administration’s HHS.
The legal challenge claims health care funding reductions are unlawful, asserting that the federal government failed to offer a reasonable justification or supporting evidence for the decision. According to the attorneys general, the cuts could have devastating consequences for public health.
“The Trump administration is now terminating millions in grants being used in our state to support vaccine clinics for kids, crisis mental health services, opioid abuse intervention, and to control disease spread in health care facilities,” Michigan Attorney General Dana Nessel said in an announcement. “And once again they’re breaking the law to take money that has been granted to the states. These programs keep Michigan healthy and, in some cases, help save lives, and that’s worth standing up and fighting for.”
In Michigan, funding cuts have meant the end of a mental health grant to support state residents with serious mental illness or severe emotional disturbances. A program to support SUD services for marginalized and underserved populations, including pregnant women and rural populations, has also been terminated.
Behavioral health groups speak up
On April 2, 12 national mental health and substance use organizations released a statement related to the “drastic” staffing cuts at (HHS).
“As the nation’s leading mental health, suicide prevention and substance use organizations, we are deeply alarmed by the widespread, immediate staffing cuts and dismantling of entire offices occurring at HHS,” the statement read. “HHS’s critical work is vital to increasing access to mental health and substance use disorder care, improving suicide prevention efforts, stemming the opioid epidemic and reimagining our nation’s mental health crisis response.”
The organizations included:
– National Alliance on Mental Illness (NAMI)
– American Foundation for Suicide Prevention (AFSP)
– American Psychiatric Association
– American Psychological Association
– Inseparable
– Legal Action Center (LAC)
– Mental Health America (MHA)
– National Association for Behavioral Healthcare
– National Association for Rural Mental Health (NARMH)
– National Association of County Behavioral Health and Developmental Disability Directors (NACBHDD)
– The JED Foundation
– Treatment Advocacy Center (TAC)
“This has the potential to jeopardize years of work and recent progress, like reducing overdose deaths,” the statement continued.
April 1, 2025
Trump administration cuts $11 billion in behavioral health funding
The Trump administration has slashed billions of dollars in funding for behavioral health programs.
Late in the week of March 24, multiple newsrooms reported on how the administration canceled or revoked more than $11 billion in COVID-era funding grants. These grants were frequently tied to addiction treatment programs, mental health care initiatives and other behavioral health efforts. The federal funding had been scheduled to run through September of this year, according to NPR reporting.
“The COVID-19 pandemic is over, and HHS will no longer waste billions of taxpayer dollars responding to a non-existent pandemic that Americans moved on from years ago,” an HHS spokesperson told NPR.
What those cuts already mean for some states
Some states have already started to feel the impact of those cuts.
In Nevada, terminated grants included community mental health block grants funded through the American Rescue Plan Act, according to The Nevada Independent. The grants were meant to support mental health care for adults with serious mental illness and children with “severe emotional disturbances.”
Cody L. Phinney, administrator of the Nevada Division of Public and Behavioral Health, sent a letter to the state’s agency partners that manage the awards affected by the cuts.
“Please note that all activity on the affected subawards must cease immediately, as these funds will not be available to reimburse any expense that occurred after March 24, 2025,” Phinney wrote.
Nearly 50 people have already lost their jobs because of the cuts, according to the Nevada Independent.
Restructuring of health care agencies
The Trump administration has announced its plans to consolidate the Substance Abuse and Mental Health Services Administration into a new entity dubbed the Administration for a Healthy America (AHA). The change is part of a sweeping restructuring of America’s health care regulatory entities.
Overall, the restructuring will consolidate 28 divisions of HHS into 15.
“Over time, bureaucracies like HHS become wasteful and inefficient even when most of their staff are dedicated and competent civil servants,” HHS Secretary Robert F. Kennedy, Jr., said in an announcement.
An uncertain future for substance use disorder treatment
Skeptics of the restructuring fear the changes – paired with funding cuts – will have an outsized influence on substance use disorder treatment in the U.S.
For instance, SAMHSA would be folded into a newly formed office, where its 700-plus staff members would work alongside personnel from other agencies focused on chemical exposure and occupational injuries.
Sources who spoke to the Associated Press said the change could stall progress on overdose deaths and create confusion around priorities.
“There’s a reason why we have reduced overdose in this country; it’s because SAMHSA has been doing its job so well,” Dr. Ruth Potee, medical director for seven methadone clinics in Massachusetts, told AP. “My jaw drops at this news.”
HHS eliminates thousands of jobs
The HHS shakeup will come with tens of thousands of job cuts. The current 82,000 full-time employees will be reduced to 62,000, according to the Trump administration.
Many other health care-facing agencies will see their workforces contract as well:
– FDA will decrease its workforce by approximately 3,500 full-time employees.
– The CDC will decrease its workforce by approximately 2,400 employees.
– The NIH will decrease its workforce by approximately 1,200 employees.
Kennedy renews public health emergency on opioid crisis
The U.S. Department of Health and Human Services renewed the public health emergency on the country’s opioid crisis on March 18. Doing so will allow “sustained federal coordination efforts” and “preserve key flexibilities” for HHS and its agencies, according to department officials.
“Although overdose deaths are starting to decline, opioid-involved overdoses remain the leading cause of drug-related fatalities,” Secretary Kennedy said in an announcement. “This administration is going to treat this urgent crisis in American health as the national security emergency that it is.”
The previous Trump administration first declared the public health emergency in 2017. It was set to expire on March 21, 2025.
Want the latest behavioral health policy moves in your inbox? Sign up for our newsletter.
