The Biden administration’s federal budget proposal for fiscal year 2023 includes a landmark investment of $4.77 billion dedicated to transforming mental health and substance use disorder (SUD) coverage and infrastructure throughout the United States. This unprecedented allocation of federal mental health funding signals the administration’s urgent commitment to tackling a worsening behavioral health crisis—one that has been dramatically intensified by the ongoing COVID-19 pandemic.
Unveiled by the White House as part of a broader $5.8 trillion budget, this proposal outlines the administration’s key priorities, including President Biden’s “Unity Agenda” introduced in the recent State of the Union address. The agenda targets four main objectives: combatting the opioid epidemic, addressing mental health challenges especially among youth, supporting veterans suffering from burn pit exposures, and launching the Advanced Research Projects Agency for Health. Central to these efforts is the strategic deployment of federal mental health funding to improve access, quality, and outcomes in behavioral health care.
The Mental Health Crisis and the Need for Robust Federal Mental Health Funding
Mental health is recognized as essential to overall health and well-being, yet millions of Americans face barriers to accessing quality behavioral health services. The pandemic has only exacerbated this crisis, increasing rates of anxiety, depression, substance use, and other related disorders. The budget proposal highlights this reality, stating that the country faces a mental health crisis intensified by the COVID-19 pandemic, requiring urgent reforms in health coverage and major investments in the mental health workforce.
Federal mental health funding in this proposal is geared towards systemic reforms designed to remove barriers, increase coverage, and ensure that behavioral health is prioritized as a vital component of healthcare.
Strengthening Mental Health Parity Enforcement Through Federal Mental Health Funding
A major focus of the budget is the enforcement of the Mental Health Parity and Addiction Equity Act (MHPAEA), a 2008 law that mandates insurers provide equal coverage for mental health and substance use disorder benefits compared to physical health benefits. Despite the law’s intent, enforcement has been weak, with many health plans failing to comply, which has severely limited access to behavioral health services.
To address this, the budget sets aside $275 million over the next decade for the U.S. Labor Department to improve its enforcement capabilities. This investment in federal mental health funding will empower regulators to hold insurance companies accountable and ensure compliance with parity requirements.
Moreover, the proposal extends MHPAEA protections to Medicare, which currently does not mandate parity in coverage. This expansion of federal mental health funding to Medicare beneficiaries could open doors for millions more Americans to receive equitable behavioral health services.
Expanding Behavioral Health Coverage and Reducing Financial Barriers
The budget allocates roughly 65% of the federal mental health funding—about $3.08 billion—to two key initiatives focused on access and affordability. Nearly $1.88 billion is designated to improve behavioral health access within private insurance markets, ensuring broader coverage for mental health and substance use disorder treatment.
An additional $1.2 billion will support a new policy requiring coverage of three behavioral health visits and three primary care visits annually without any cost-sharing. This effort to eliminate co-pays and deductibles is designed to reduce financial barriers that often prevent people from seeking timely care.
By leveraging federal mental health funding in these areas, the administration aims to create a more accessible and equitable healthcare system where mental health care is treated as a core component of overall health.
Investing in the Behavioral Health Workforce and Medicaid Programs
Addressing workforce shortages remains a critical component of the mental health strategy. The budget commits $750 million to strengthen the behavioral health workforce through training, recruitment, and retention programs. Without an adequate supply of qualified providers, expanded coverage alone will not meet patient needs.
Additionally, $500 million is allocated to a Medicaid performance bonus fund that incentivizes states to improve behavioral health services over the next five years. Medicaid covers millions of vulnerable individuals who often face complex behavioral health challenges, making this federal mental health funding a vital lever for systemic improvements.
Long-Term Investments in Community Mental Health Centers and Medicaid Capacity
The administration also envisions sustained support for Community Mental Health Centers (CMHCs), which provide vital behavioral health services locally. Funding for CMHCs is set to more than double from $124 million in 2023 to $289 million in 2024, with continued increases planned through 2032, reaching $413 million annually. This stable and growing federal mental health funding will help expand service availability in communities across the country.
Further, the budget proposes a six-year, $7.5 billion program to expand Medicaid provider capacity specifically for mental health and substance use disorder treatment from 2023 through 2028. Alongside this, an additional $7.5 billion over ten years is allocated to expand and permanently establish community behavioral health demonstration programs within Medicaid.
These programs have shown promise in improving care integration, access, and quality, and the proposed federal mental health funding would help scale their success nationally.
Political and Practical Challenges Ahead
While the White House budget proposal offers a comprehensive vision backed by significant funding, it remains a symbolic first step that requires months of negotiation and approval by Congress. Stakeholders from insurers, providers, and advocates will play critical roles in shaping the final outcome.
Insurance industry lobbyists are already engaging with congressional leaders to influence forthcoming parity legislation. Meanwhile, advocacy groups have praised the administration’s focus on parity enforcement and expanded access as essential for advancing behavioral health equity.
As Mark Dunn, public policy director for the National Association of Addiction Treatment Providers, noted, “These proposals do signal the Administration’s priorities and how they may direct future resources once appropriated.”
Conclusion
The Biden administration’s proposed federal mental health funding package represents a bold and multi-faceted approach to addressing the nation’s behavioral health challenges. By strengthening parity enforcement, expanding coverage and affordability, investing in workforce capacity, and supporting community mental health infrastructure, this funding has the potential to reshape mental health and substance use disorder care in the United States.
If enacted, these investments could significantly improve access to care for millions, reduce health disparities, and build a more resilient behavioral health system equipped to meet current and future demands. The coming months will be critical as Congress considers these proposals and their potential to bring about transformative change.
