Behavioral Health 

• Federal Policy Impacts
• Federal Policy Impacts
• Medi-Cal Eligibility
• Medi-Cal Benefits
• Behavioral Health
• Reproductive Health
• Medi-Cal Financing
• Section 1115 Waivers

Notable Federal Actions

• Cutting Homelessness Grants
  • In November 2025, the U.S. Department of Housing and Urban Development (HUD) proposed restrictive funding requirements for federal Continuum of Care grants, including caps on permanent housing funding and mandatory treatment or service participation requirements to receive housing supports. California leaders warned these changes could cost the state more than $250 to $300 million annually for permanent supportive housing and rapid rehousing in California. HUD withdrew the notice in December 2025, due to litigation led by a coalition of state Attorneys General, including Attorney General Bonta.
• Shifting Homelessness Policy
  • In July 2025, President Trump issued Executive Order 14321, “Ending Crime and Disorder on America’s Streets,” directing federal agencies to support broad enforcement actions against people experiencing homelessness and limiting harm reduction funding.
• Expanded Restrictions
  • In July 2025, federal agencies broadened immigration-based eligibility restrictions under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 to include mental health grants and substance use disorder block grants. The revised interpretation newly identified these grant programs as “federal public benefits” requiring immigration-status screening.
  • California joined New York and other states in a lawsuit, and in September 2025, a federal court issued a preliminary injunction blocking enforcement in plaintiff states while litigation proceeds.

Actions California Is Taking

• Community-Based Behavioral Health Reform
  • Through California Advancing and Innovating Medi-Cal (CalAIM), Behavioral Health Community-Based Organized Networks of Equitable Care and Treatment) (BH-CONNECT) expands access to community-based care for Medi-Cal members with significant behavioral health needs and supports whole-person, integrated care.
• Behavioral Health Services Act (BHSA)
  • BHSA, enacted through Proposition 1, reforms behavioral health funding to prioritize services for people with the most significant mental health needs, adds substance use disorder treatment, expands housing interventions, and strengthens oversight and equity.
• Behavioral Health Infrastructure Bond Act
  • DHCS is administering $4.4 billion of the $6.4 billion Behavioral Health Infrastructure Bond through the Behavioral Health Continuum Infrastructure Program (BHCIP) to build and expand treatment facilities, crisis care sites, and supportive housing.
  • In May 2025, DHCS announced $3.3 billion for BHCIP projects statewide.
  • In March 2026, an additional $1.18 billion was awarded in the second round of BHCIP project funding.
• Children and Youth Behavioral Health Initiative (CYBHI) 
  • CYBHI expands access to youth behavioral health services through school‑based supports, digital tools, provider training, and community grants to help children, teens, and young adults receive timely, culturally responsive care.

Page last updated July 1, 2026