By OPEN MINDS Circle
A proposed 2027 federal health budget would eliminate the nation’s primary mental health and addiction agency and cut behavioral health funding by about 8%.
The fiscal year (FY) 2027 budget for the U.S. Department of Health and Human Services (HHS) would fold the Substance Abuse and Mental Health Services Administration (SAMHSA) into a new Administration for a Healthy America (AHA), alongside the Health Resources and Services Administration (HRSA), the Office of the Assistant Secretary for Health (OASH), and several programs from the Centers for Disease Control and Prevention (CDC). The restructuring is outlined in the HHS Budget in Brief, released April 2, 2026.
“The elimination of SAMHSA is more than an organizational change—it shifts behavioral health from having a dedicated federal voice to being one priority among many,” said Stuart Buttlaire, Ph.D., vice president of clinical excellence and leadership with OPEN MINDS.
Sharon Hicks, MBA, MSW, senior associate with OPEN MINDS, said placing behavioral health within a broader “health and well-being” mission could dilute focus on mental illness and substance use disorders as distinct clinical conditions.
Funding for SAMHSA programs would fall from approximately $7.35 billion in FY 2026 to $6.77 billion in FY 2027, a reduction of about $576 million. The proposed AHA would have a total discretionary budget of $14.7 billion and focus on primary care, maternal and child health, mental health, HIV/AIDS, and workforce development.
The proposal would replace several major behavioral health funding streams with a single $4.62 billion Behavioral Health Innovation Block Grant, consolidating the Community Mental Health Services Block Grant, the Substance Use Prevention, Treatment, and Recovery Block Grant, and the State Opioid Response grants.
“Replacing targeted funding streams with a single block grant introduces greater variability in how funds are allocated,” said Dr. Buttlaire. “It becomes harder for provider organizations to plan and sustain services.”
Ms. Hicks said the shift could disrupt states with more developed behavioral health systems and increase pressure on providers serving uninsured and underinsured populations.
The proposal also includes reductions across multiple behavioral health funding categories. Mental health funding would decrease to $1.49 billion, down from $2.82 billion in FY 2026. Substance use prevention funding would drop to $89 million, down from $350 million, while substance use treatment funding would decline to $490 million from $564 million.
“These reductions affect the front end of the system—where many individuals first engage in care,” said Dr. Buttlaire. “When those services are reduced, demand shifts downstream to higher-cost settings.”
The budget would eliminate a range of grant programs currently administered by SAMHSA, including programs focused on workforce development, prevention, integration of primary and behavioral health care, homelessness, and services for specific populations. Programs proposed for elimination include the Strategic Prevention Framework, Primary and Behavioral Health Care Integration programs, Minority Fellowship Program, Tribal Behavioral Health Grants, and Mental Health Awareness Training.
“Programs not tied to billable services are particularly vulnerable,” said Dr. Buttlaire. “At the same time, eliminating workforce programs further constrains an already stretched system.”
Ms. Hicks said programs targeting underserved populations may be at particular risk under the new structure, potentially reducing access to care for high-need groups.
HHS officials said the consolidation is intended to reduce duplication, streamline programs, and improve coordination across federal health initiatives. The proposal also introduces a new Behavioral Health and Substance Use Disorder Resources for Native Americans Grant Program, funded at $80 million.
The proposed HHS discretionary budget totals $111.1 billion for FY 2027, representing a $15.8 billion (12.5%) reduction from FY 2026 levels for the agencies and programs included in the restructuring. The proposal is subject to congressional approval.
The changes would shift more responsibility for funding decisions to states and local systems, while reducing the number of federally directed programs.
“In this environment, organizations that can demonstrate clear outcomes and value will be better positioned to sustain funding,” said Dr. Buttlaire.
A link to the full text of HHS Budget in Brief Fiscal Year 2027 is in the OPEN MINDS Circle Library.
OPEN MINDS last reported on the MAHA initiative in Federal MAHA Commission Unveils Strategy To ‘Make Our Children Healthy Again’ on September 23, 2025 (accessed April 20, 2026).
OPEN MINDS last reported on federal efforts to reshape behavioral health grants in SAMHSA Issues, Then Quickly Rescinds Grant Cancellation Notices on January 19, 2026.
For more information, contact: Substance Abuse and Mental Health Services Administration, 5600 Fishers Lane, Rockville, Maryland 20857; Fax: 240-276-2135; Email: media@samhsa.hhs.gov; Website: https://www.samhsa.gov/