As Texas legislators prepare for the 2025 session, mental health advocates are pressing for the replacement of expiring federal pandemic relief funding, which has been crucial for supporting community-based mental health programs. The issue is expected to top lawmakers’ agendas, alongside addressing staffing shortages at the 988 suicide prevention hotline, expanding mental health services in schools, and revitalizing the state’s mental health workforce.
Texas Comptroller Glenn Hegar recently forecasted a $20 billion surplus for the state as the 2025 legislative session convenes on January 14. While the state faces an influx of cash, advocates worry that competing priorities—such as school vouchers, campus security, and Medicaid enrollment reforms—could limit available funds for mental health initiatives.
A looming deadline adds urgency to these concerns: Federal COVID-19 relief funding, which has provided vital financial support to community mental health programs, will expire on December 31. The $350 billion federal program, part of the American Rescue Plan Act of 2021, allocated $203.4 million in mental health grants and an additional $252.8 million for substance abuse prevention and treatment in Texas.
Among the initiatives supported by this funding were telepsychiatry services in schools and libraries, community-based mental health programs in churches, and peer-to-peer services that foster mental wellness in local communities. These programs have played a critical role in mitigating the effects of the state’s ongoing mental health provider shortage, which has led to extensive waitlists for services.
“There is no formal plan in place to replace the American Rescue Plan funding,” said Alison Mohr Boleware, policy director at the Hogg Foundation for Mental Health. “Many advocates and stakeholders are sounding the alarm about what could happen if these funds are not replaced.”
With the expiration of federal funds and the transition to a new presidential administration, Texas lawmakers must quickly determine how to secure funding to sustain these programs while continuing support for existing initiatives like the Texas Child Mental Health Care Consortium, a group tasked with improving youth mental health services. The consortium, which has benefited from federal relief funding, is also at risk of losing critical financial support.
“The Texas Legislature has made historic, life-saving investments in mental health over the last decade,” said Andy Keller, president and CEO of the Meadows Mental Health Policy Institute. “The 89th legislative session represents an opportunity to build on that commitment.”
Ahead of the legislative session, lawmakers have already filed a range of bills aimed at addressing mental health issues across the state. Here are some key proposals to watch:
Expanding Medicaid Providers to Address Mental Health Shortages
Texas faces significant mental health provider shortages, with more than 95 percent of its 254 counties designated as mental health professional shortage areas by the federal government. This issue is especially pronounced in rural, border, and frontier counties, where access to care is limited.
The problem is compounded for individuals enrolled in Medicaid, the health insurance program for low-income residents. Several bills have been introduced to increase the number of Medicaid providers offering mental health services.
One such proposal, Senate Bill 469, would allow social workers with master’s degrees who are awaiting clinical licenses to treat Medicaid patients. Currently, these social workers are unable to bill Medicaid until they complete two years of supervision by a licensed clinician. Removing this restriction could quickly add over 1,500 licensed social workers to the Medicaid system, addressing the state’s critical workforce shortage.
“This is a workforce priority,” Boleware emphasized.
Additionally, House Bill 154 aims to increase Medicaid reimbursement rates for mental health and substance use services. Under the current system, Medicaid pays between $60 and $122 for a 50-minute therapy session, while providers often charge $180 or more for the same service. This reimbursement gap has led many Texas mental health professionals to stop accepting Medicaid patients.
To further expand access to care, Senate Bill 176 proposes allowing schools to bill Medicaid for delivering behavioral health services on campus. This would create a new avenue for children in the Medicaid program to access mental health care, particularly in underserved areas.
As the 2025 legislative session approaches, advocates remain hopeful that lawmakers will prioritize mental health funding and address the workforce shortages that continue to hinder access to care for Texas residents in need.
