The first six months of 2025 have seen major policy pitches for behavioral health, scrutiny of psychiatric medications, and proposed Medicaid cuts.
Here are the five biggest developments to know:
- Behavioral health providers are bracing for the impact of proposed Medicaid cuts. The House of Representatives passed the One Big Beautiful Bill Act, a more than 1,000-page budget reconciliation bill, May 22. The bill cuts Medicaid spending by nearly $800 billion over 10 years, by implementing work requirements for beneficiaries, increasing redetermination frequency and cutting federal funding for states that provide Medicaid benefits to undocumented immigrants. The Senate has yet to vote on the reconciliation bill.
An estimated 7.8 million people would lose Medicaid coverage by 2034 if the cuts passed by the House become law, according to the Congressional Budget Office
The bill’s work requirements do include exceptions for individuals with mental health and substance use disorders.
Chris Hunter, CEO of Acadia Healthcare, told investors he is optimistic many of the health system’s patients will be exempt from work requirements. - Leaders in the Trump administration have turned their attention to the use of psychiatric medication among children. In an executive order issued in February, President Donald Trump directed HHS to investigate potential threats posed by the prescription of psychiatric medications to children. In a report on childhood chronic disease, the White House’s Make America Healthy Again Commission raised concerns children are being overdiagnosed and overprescribed medication when it comes to behavioral health.
- HHS will not enforce mental health parity regulations implemented by the Biden administration while it reconsiders the rules, the agency said in May. The regulations would bar health plans and employers from using more restrictive prior authorization requirements for mental health than for other forms of care. They also required health plans and employers to study how their mental health parity policies worked in practice.
Some states have chosen to implement more stringent mental health parity regulations. New York state will introduce new regulations requiring insurers to meet wait-time standards for behavioral health appointments. - The Trump administration has proposed restructuring the Substance Abuse and Mental Health Services Administration. Under the proposal, the agency would be combined with several other agencies as part of the new Administration for a Healthy America. A proposed HHS budget would eliminate more than two dozen federal mental health and substance use programs.
- In January, The Drug Enforcement Administration and HHS published proposed rules regulating telehealth prescribing of controlled substances. The proposal would create a three-tier system to regulate the prescription of controlled substances. The first tier would allow physicians and other qualified clinicians to prescribe schedule III-IV drugs via telehealth. The second would allow only specialized providers, including psychiatrists, to prescribe schedule II drugs through telehealth.
