White House Proposes Behavioral Healthcare Funding Changes in FY 2027 Budget

The White House on Friday, April 3 released its Fiscal Year (FY) 2027 budget and requested $111.1 billion in discretionary budget authority for the U.S. Health and Human Services Department, a 12.5% decrease (or about $15.8 billion) from the 2026 enacted level.

Each year Congress considers appropriations bills that provide specific funding amounts for various functions of the federal government, known as discretionary spending. The White House’s FY 2027 budget – significant for outlining the president’s priorities – includes notable changes to behavioral health programs for FY 2027 as HHS continues to propose reorganizing several agencies into a new Administration for a Healthy America (AHA), including the Office of the Assistant Secretary for Health, Health Resources and Services Administration, Substance Abuse and Mental Health Services Administration (SAMHSA), and several centers and programs from the Centers for Disease Control and Prevention.

Within AHA, the Trump administration proposes cutting more than $500 million of current SAMHSA programs, including eliminating various programs focused on children’s mental health, homelessness, criminal justice, and several minority-focused programs.

HHS also proposes consolidating the three largest SAMHSA grant programs – the Substance Use Prevention, Treatment, and Recovery Services Block Grant, State Opioid Response Grant, and Community Mental Health Services Block Grant – into a single Behavioral Health Innovation Grant program, while maintaining the existing cumulative funding level. The request also retains funding for Opioid Treatment Program regulatory activities.

Meanwhile, the Veterans Affairs Department (VA) requests $644 million additional funds to enhance access to residential behavioral health services within VA facilities or the Community Care Network.

Listed below are the budget’s select top-line funding requests, with adjacent figures noting how much more or less Congress appropriated for that budget line item in 2026:

• U.S. Department of Health and Human Services
  • Mental and Behavioral Health: $6.8 billion, -$576 million
  • Health Workforce: $1.2 billion, -$872 million
  • Medicaid: $785.2 billion, +$5.5 billion
  • Medicare (benefits): $686.9 billion, +$93 billion
  • Administration for a Healthy America: $14.7 billion, -$5 billion
  • Centers for Medicare & Medicaid Services: $1.5 trillion, +$98.2 billion
• U.S. Department of Labor
  • Employee Benefits and Security Administration: $181 million, -$10 million
• U.S. Department of Veterans Affairs
  • Note: This new program would include medical expenses as well as indirect costs, such as care coordination and administrative overhead.
  • Medical Community Care: $56.2 billion, +$8.1 billion
  • Community Care: $74.8 billion (advanced appropriations for FY 2028)

If you have questions, please contact NABH Vice President of Public Policy Dan Schwartz.