Medicaid is a key component of the U.S. healthcare system, providing health insurance coverage for approximately one in five Americans, including low-income children, adults, and people with disabilities. Medicaid plays a significant role in the behavioral health system, accounting for a quarter of all spending for both mental health and substance use treatment, making it the largest single payer of behavioral health services in the United States.

On July 4, 2025, the “One Big Beautiful Bill Act,” H.R.1, was signed into law. The legislation cuts federal funding for Medicaid by 15%, or $1 trillion, over 10 years.