Strengthening Medicaid for Serious Mental Illness Act

This bill lets states use Medicaid to cover intensive, community-based mental health services for adults with serious mental illness, starting January 1, 2026. The goal is to help people get care where they live, avoid unnecessary time in hospitals or institutions, and keep care going when young adults turn 21 and age out of children’s benefits.

Services can include assertive community treatment (a 24/7 team-based approach for people at high risk), supported employment, peer support, mobile crisis teams, intensive case management, and housing-related supports. These services do not include room and board. The federal government would pay a bigger share of the cost when states offer these services, with even more help when they offer more of them—up to 25 percentage points more. The bill also sets aside $20 million for state planning grants to help build these programs. Services must be provided in the most integrated setting, and states must report data at least every two years on access, use, outcomes, and disparities. Children’s current Medicaid rights to intensive services are not reduced by this bill.

• Who is affected: Adults 21 and older with serious mental illness who are on Medicaid and have incomes up to 150% of the federal poverty level.
• What changes: States can cover community-based mental health and housing supports; the federal government pays a bigger share; planning grants help states get started.
• When: Starts January 1, 2026.