On May 12, the House Energy and Commerce Committee unveiled a budget reconciliation package containing sweeping Medicaid program changes that could jeopardize health care access for millions of Americans, including those with mental health conditions.
Here's what you need to know about this developing legislation and its potential impact.
Understanding Budget Reconciliation
As we reported in our April Visions Newsletter, budget reconciliation allows Congress to fast-track certain fiscal legislation. Unlike typical Senate bills requiring 60 votes to overcome a filibuster, reconciliation measures need only a simple majority (51 votes). This process can address "mandatory" spending programs like Medicaid and Medicare but cannot modify Social Security.
The Committee on Energy and Commerce must identify at least $880 billion in savings for fiscal years 2025–2034. According to preliminary Congressional Budget Office (CBO) estimates, the current Medicaid and ACA proposals would generate $715 billion in savings—but at the steep cost of 8.6 million Americans losing health insurance coverage, thereby losing their mental health benefits.
Key Medicaid Provisions
The reconciliation package includes several provisions that would fundamentally alter Medicaid:
Work Requirements: Childless adults of working age without a qualifying disability would need to document 80 monthly hours of employment, community service, or educational enrollment to maintain coverage. While the proposal includes exemptions for various groups (pregnant women, those under 19 or over 64, medically frail individuals), implementing these requirements has historically resulted in significant coverage losses—even among those who meet exemption criteria but struggle with documentation processes.
More Frequent Eligibility Checks: States would need to conduct eligibility redeterminations for Medicaid expansion adults every 6 months rather than annually, creating additional administrative hurdles that typically reduce enrollment.
Reduced Federal Funding: States providing health care to undocumented immigrants would see their federal match for Medicaid expansion populations reduced from 90% to 80%. The bill would also ban states from implementing new provider taxes—a common financing mechanism used to draw additional federal Medicaid dollars.
Cost-Sharing Increases: Medicaid expansion adults with incomes above 100% of the federal poverty level would face new cost-sharing requirements up to $35 per service.
Transgender Care Restrictions: The bill prohibits federal Medicaid funding for gender transition procedures for individuals under 18.
Provider Screening: States would conduct monthly database checks to identify and disenroll providers terminated by other states or HHS.
Beyond Medicaid
The legislation also targets the Affordable Care Act with stricter eligibility verification processes, rolled-back special enrollment periods, and exclusion of gender transition procedures from essential health benefits. However, an additional key provision that counselors support would modify the Medicare physician fee schedule conversion factor to consider inflation.
What's at Stake for Mental Health
For mental health advocates, these proposed changes to Medicaid are alarming. Medicaid is the largest payer for mental health services in the United States, covering a significant portion of Americans with mental illness and substance use disorders. Work requirements, increased administrative burdens, and more frequent eligibility checks create barriers precisely for those who may struggle most with documentation and consistency due to their health conditions.
The CBO projects that 8.6 million people would lose coverage, which translates to millions potentially losing access to critical mental health and substance use treatment. For many, Medicaid serves as their only pathway to care.
Next Steps and Advocacy
The Energy and Commerce Committee has scheduled an initial markup of their proposed legislation beginning May 13 to consider these Medicaid recommendations. If approved, the provisions will be integrated into a comprehensive budget reconciliation bill for consideration by the full House of Representatives.
This moment calls for immediate advocacy. Using NBCC's Voter Voice Grassroots Platform, you can contact your congressional representatives to express opposition to these Medicaid cuts. Emphasize how these changes would affect people with mental health conditions in your community and state.
As counselors and mental health advocates, we understand the vital role Medicaid plays in ensuring access to treatment. Now is the time to ensure our representatives understand this too—before millions lose their lifeline to essential care.
