With the long-awaited passage of the American Rescue Plan, mental health services across the United States of America are about to receive desperately-needed financial support from the federal government.1

What Is the American Rescue Plan?

Biden signed the American Rescue Plan on March 11, 2021. The legislation aims to improve mental health care throughout the nation by setting aside funding in the realm of $4 billion for programs that support the prevention of, and treatment for, mental health and substance use disorders.

The American Psychiatric Association has praised the final package, with CEO and Medical Director Saul Levin, MD, MPA stating, “We will not recover sufficiently from this pandemic long-term unless we address our mental health with the same urgency and attention as our physical health.”2

The American Rescue Plan details include funding a number of mental health programs, both existing and yet to be developed, but it is not the only major development on the horizon. In response to the growing public demand for mental health care since the onset of the COVID-19 pandemic (on top of a psychiatrist shortage), states have been considering, developing, and implementing a host of new and improved mental health initiatives on their own – many of which will now have the opportunity to be expanded thanks to these new federal funds.

Mental Health Mobile Crisis Support Teams and the 988 Hotline

Last October, just days before the 2020 election, the federal government passed legislation creating the National Suicide Prevention and Mental Health Crisis Hotline System.3 Overshadowed at the time by a highly contentious election and a congested news cycle, this legislation is now getting the attention it deserves as states work to implement the new policy. The federal legislation creates a 988 hotline to be used by those experiencing a mental health crisis and/or contemplating suicide, replacing the current underutilized 10-digit number (800-273-8255).

The 988 hotline must be in place nationwide no later than July 2022, and many states are both getting a jumpstart on their hotline, as well as making adjustments and improvements to the ways in which service providers respond to these mental health calls.

Wisconsin has already received a $171,701 grant to develop an implementation plan for its 988 system, and California, Washington, and Oregon are currently considering bills that would implement the 988 system,4-7 as well as create mental health mobile crisis support teams staffed by mental health professionals that would respond to 988 calls (in place of police, fire, and ambulance services, coordinating with these services when appropriate). New York City is piloting a similar response program.

The Oregon bill, HB 2417, has received incredibly strong support, including from the Metropolitan Mayors’ Consortium, representing 25 cities and over 1.7 million Oregonians, the labor union AFSCME, and the Partnership for Safety and Justice.8

The American Rescue Plan supports the development of mental health mobile crisis support teams.1 The new legislation provides a federal matching payment to state Medicaid programs equal to 85% of the cost for community-based mobile crisis intervention services. The mobile crisis teams eligible for federal funding will include at least one behavioral health care professional capable of conducting a mental health assessment of the individual in crisis, as well as other professionals or paraprofessionals with appropriate expertise in behavioral health or mental health crisis response, including nurses, social workers, and peer support specialists.

These teams will be trained in trauma-informed care, de-escalation strategies, and harm reduction, and they must be available 24 hours per day, every day of the year. Fifteen million dollars has been appropriated so that grants may be made to the states to help them implement and administer these programs.

The American Rescue Plan and Mental Health Provider Shortages

The COVID-19 pandemic has caused a surge in people attempting to access mental health services, which has shed light on the dire need to strengthen and grow the mental health workforce.9 The federal government, aiming to address this need within the American Rescue Plan, just appropriated $100 million for behavioral health workforce education and training, $80 million for pediatric mental health care access, and $420 million for funding expansion grants for certified community behavioral health clinics.1

Looking at specific deficits in its mental health workforce, New Jersey is considering a bill that would permit higher education institutions to allow final-year graduate students in mental healthcare programs to graduate or start residencies or clinical programs early during the 2020-2021 and 2021-2022 academic years.10 Students would need to have completed all required coursework and would have a school-appointed staff member mentor them during participation in the residency or clinical program.

Massachusetts has also been considering ways to strengthen its own mental health workforce, first with a bill that failed to pass last year, and again this year through a newly introduced version.11,12 According to Massachusetts State Senator Diana DiZoglio, the legislation would improve patient access to care by forming a pilot program “aimed at creating a workforce pipeline to encourage and support individuals from diverse backgrounds to work toward careers in mental health.”13 If adopted, the new law would also create an interim licensure program for Licensed Mental Health Counselors so that they can be reimbursed by insurance for their services and be eligible for state and federal grant and loan forgiveness programs, making it more financially viable for one to choose a career as a mental health counselor.

American Rescue Plan Expands Insurance Coverage for Mental Health Services

To truly expand access to mental health services, expanding the workforce will be insufficient without complementary efforts to increase health insurance coverage for these services, making them affordable to patients.

Responding to calls for increased coverage, policymakers around the nation have been adopting telehealth and mental health parity laws that require payers to reimburse telehealth encounters at the same rate as in-person encounters.14 Last year, Oklahoma passed landmark mental health parity legislation, stating that insurers may not apply nonquantitative treatment limitations with respect to mental health conditions and substance use disorders any more stringently than to medical and surgical benefits.15 Utah recently joined this movement by passing a law requiring payment parity for providers who conduct remote mental health visits.16 This expanded telehealth payment parity measures that Utah had implemented earlier in the pandemic, as mental health visits were not specifically included in their original telehealth parity provisions.

Biden’s American Rescue Plan details will also expand health insurance coverage, although not specifically in regard to mental health (coverage for mental health will vary state-to-state, but should comply with the federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008). Aiming to preserve health benefits for workers who have recently lost their jobs, the Plan contains premium assistance for COBRA continuation coverage. Further, the plan improves the affordability of qualified health plans by expanding premium assistance for consumers during 2021 and 2022.

The federal government has also temporarily reopened the Healthcare.gov health insurance exchange from February 15 to May 15, 2021, to give uninsured Americans an opportunity to consider their state’s available marketplace options.

How the American Rescue Plan Will Improve Mental Health Care in Schools

As students begin to return to in-person school after approximately a year of disruption to their lives and educations due to COVID-19, educators and policymakers are considering ways to support students’ mental health. In Colorado, State Representative Dafna Michaelson Jenet is developing legislation, which she aims to introduce soon, that would provide every K-12 child in Colorado an optional mental health evaluation before the start of the 2021-22 school year. According to Rep. Jenet, “After being quarantined in our homes, and experiencing the traumas of COVID, every single one of our kids deserves to be heard from and provided a warm handoff to a qualified mental health care provider in the community, should they need ongoing support.”17

Taking another approach to children’s mental health, initiatives in a number of states have recently aimed to legitimize mental health as a valid medical reason for students to miss the occasional day of school. Maryland is currently considering legislation that, if passed, would allow students to miss school once every quarter for mental health reasons.18 The law would not require students to provide a doctor’s note to access these mental health days ­­– a positive move, as such a requirement could make this health benefit unavailable to students who lack the economic and social resources to quickly secure a doctor’s appointment. The Maryland proposal was inspired by a recent push from a number of other states to treat mental and physical health equally for school absences, with Utah having become the first state to pass such a law in 2018 and Oregon following suit one year later when it made mental health a valid reason for a student to use an excused absence.19

Editor’s Note: Employers are slowly taking this approach as well by providing mental health days and other services to employees; Modern Health is connecting employers to services and strategies; while other companies are hiring Directors of Workplace Mental Health.

President Biden has also expressed a desire to improve mental health care for our nation’s schoolchildren. In an interview during his candidacy,20 the President lamented that while 1 in 5 children in the US experiences mental health problems, the current school psychologist to student ratio in this country is roughly 1 to 1,400.

The President then went on to say that, “As President, I will make an unprecedented investment in school mental health professionals in order to double the number of psychologists, guidance counselors, nurses, social workers, and other health professionals employed in our schools, and partner with colleges to expand the pipeline of these professionals.”

While it does not address school psychologists directly, the American Rescue Plan does make mental health services and supports eligible for a portion of the funding provided to reopen elementary and secondary schools.1

Mental Health Awareness and Services: How to Make the Most of New Funding

While there has been very little to appreciate over the course of the COVID-19 pandemic, governments’ increased support of mental health services is one area where we can all rejoice. Mental health programs have always been severely underfunded, and the new focus on mental health services and supports has the potential to improve our nation’s collective well-being for years to come.

With the current momentum, now is the time for mental health professionals to pay attention to changes, and further, to get involved if they see important changes that need to be made. The perspective of psychiatrists, psychologists, therapists, and social workers can be invaluable to policymakers. Clinicians are encouraged to become familiar with newly passed legislation and recommend programs that can help fill gaps at both the state and federal levels. In addition, new grant opportunities may be available soon to help fund mental health services in your community.

Last Updated: Jul 12, 2021