Millions of vulnerable Americans have gained access to vital behavioral health services thanks to a temporary federal policy that allowed people to get and keep Medicaid behavioral health coverage throughout the COVID-19 public health emergency (PHE). But with the PHE’s end looming, this crucial safety net faces dramatic changes that could put millions at risk of losing Medicaid—and with it, access to necessary care. Understanding the implications of this shift is essential for policymakers, providers, and patients alike.
Medicaid’s Critical Role in Behavioral Health Care
Medicaid behavioral health coverage has long been a cornerstone of the behavioral health system in the United States. According to federal data from 2020, Medicaid accounted for nearly 30% of all mental health spending nationally, underscoring its vital role in funding care for millions. Many Medicaid beneficiaries rely on the program not only for physical health services but also for critical behavioral health treatment, including therapy, medication, and addiction recovery programs.
In January 2020, the federal government declared a public health emergency in response to the COVID-19 pandemic, which drastically altered the landscape of healthcare access and delivery. This declaration allowed for emergency regulatory flexibility across federal agencies, including Medicaid. One key provision was the Families First Coronavirus Response Act (FFCRA), passed by Congress in March 2020, which prohibited states from disenrolling Medicaid enrollees during the PHE. In exchange, states received increased federal Medicaid funding to help cover the rising number of beneficiaries.
This continuous enrollment policy was designed to maintain coverage stability amid the health crisis and economic uncertainty. As a result, Medicaid behavioral health coverage enrollment surged to record levels—reaching 87.9 million Americans in recent CMS data, a 23% increase since early 2020. This expansion included an additional 16.3 million people, with nearly 16 million adults newly covered or maintained on the rolls.
The Upcoming Expiration of the Public Health Emergency
The temporary policies protecting Medicaid behavioral health coverage are tied directly to the PHE status, which is renewed in 90-day increments by the Department of Health and Human Services (HHS). Secretary Xavier Becerra renewed the PHE effective April 16, 2025, signaling an anticipated expiration around July 2025. Under federal rules, HHS must provide a 60-day notice before ending the PHE, which would mean notifying states and the public by mid-May 2025.
Once the PHE expires, states will be able to resume standard Medicaid eligibility processes, including eligibility redeterminations and disenrollments for those no longer qualifying. The unwind of these emergency policies marks a significant administrative and human challenge. State Medicaid offices, which have postponed many eligibility reviews for up to two years, will be faced with a backlog of cases to process, potentially causing delays, confusion, and inadvertent coverage losses.
How Many Could Lose Coverage?
Analysts warn that millions of Americans could lose Medicaid behavioral health coverage in the months following the PHE’s end. The Urban Institute projects that as many as 15.8 million individuals nationwide may lose Medicaid by the end of the third quarter of 2025 due to the resumption of disenrollment processes. Meanwhile, the Kaiser Family Foundation estimates that between 5.3 million and 14.2 million people could lose coverage immediately once redeterminations restart.
These figures highlight the unprecedented scale of Medicaid enrollment increases during the pandemic and the corresponding scale of the enrollment adjustments that lie ahead. Some experts worry that disenrollments may exceed projections because of administrative errors or challenges faced by beneficiaries in completing paperwork.
The Human Toll of Coverage Loss
For many Medicaid beneficiaries, losing coverage means more than just the end of health insurance—it can mean losing access to lifesaving behavioral health services. Medicaid behavioral health coverage enrollees often face multiple social determinants of health that make accessing care more difficult, including financial insecurity, limited transportation options, inflexible or hourly work schedules, and caregiving responsibilities.
Beth Keeney, CEO of Lifespring Health Systems, a nonprofit behavioral health provider in Southern Indiana, describes how the burden of reapplying or proving eligibility can be overwhelming for individuals balancing these challenges. “Your health care looks very different when you’ve got good insurance and lots of opportunity and you can leave in the middle of the day to go to a doctor’s appointment,” she explains. “It’s very different when you’re an hourly wage earner, who is dependent on being at work all of the time. When are you going to find time to get your paperwork together for Medicaid?”
Such barriers increase the risk that people who qualify for Medicaid might nonetheless lose coverage simply because of administrative hurdles. If someone is disenrolled, it can mean interruptions in accessing medications, therapy appointments, and ongoing behavioral health treatments, which can have serious consequences for their health and well-being.
Providers Brace for Impact
Behavioral health providers who serve large Medicaid populations are preparing for the impact of the PHE’s expiration. Lifespring Health Systems serves 11 counties in Indiana and reports that about 40% of its patients are Medicaid beneficiaries, with another 15% uninsured, 20% covered by commercial insurance, and 25% on Medicare. Because Medicaid behavioral health coverage reimbursement is a major revenue source, the organization is closely watching the transition and working to support patients through the process.
Similarly, Landmark Recovery, an addiction treatment provider operating facilities across Tennessee, expects Medicaid to comprise roughly 75% of its business. Justin Hartman, Landmark’s chief revenue officer, emphasizes that while Medicaid reimbursement rates are lower than commercial insurance, they remain essential for serving low-income populations. “Medicaid rates are better than not getting reimbursed whatsoever,” Hartman says. “We can service all facets of the population — those with insurance, those on Medicaid, those who self-pay.”
He also highlights a larger issue: the nation’s addiction treatment infrastructure is already insufficient to meet demand, especially for underprivileged populations reliant on Medicaid. Landmark Recovery is expanding its Medicaid-dedicated bed capacity but warns that any large-scale disenrollment could leave many without access to critical care.
Policy Context: The Loss of Enhanced Premium Tax Credits
Another complicating factor is the impending expiration of enhanced premium tax credits for individual health insurance purchased through marketplaces, established by the American Rescue Plan in 2021. These credits made private insurance more affordable for many who might lose Medicaid. However, these enhanced subsidies expired at the end of 2022 and have yet to be extended by Congress, with legislative efforts stalled in the Senate.
Without these enhanced tax credits, many low-income individuals who lose Medicaid could face unaffordable premiums and limited coverage options. As Hartman notes, “What $20,000-a-year job is providing full-time benefits for individuals out there? It doesn’t exist.”
Moving Forward: The Need for Clear Guidance and Support
The unwinding of the Medicaid behavioral health coverage continuous enrollment policy presents a monumental operational challenge for state Medicaid agencies, providers, and beneficiaries. The backlog of eligibility redeterminations—potentially millions of cases—will require efficient processing to minimize disruption. Providers like Lifespring are calling for clear and proactive guidance from state regulators to ensure a smooth transition.
Additionally, community-based organizations and behavioral health providers may need to step up support for Medicaid enrollees navigating the redetermination process, helping them gather documents and submit paperwork on time.
Conclusion
The anticipated end of the Medicaid public health emergency marks a pivotal moment for behavioral health access in the United States. Millions who gained Medicaid behavioral health coverage during the pandemic now face the possibility of losing their health insurance—and with it, essential services for mental health and addiction treatment. While providers and policymakers prepare for the operational challenges ahead, the human impact cannot be overlooked.
Ensuring that Medicaid beneficiaries maintain continuous access to care will require concerted efforts from federal and state governments, healthcare providers, and community organizations. Without coordinated action, the rollback of emergency protections could result in significant coverage losses and exacerbate existing disparities in behavioral health treatment access.
