New Report Outlines Steps Policymakers Can Take to Protect Medicaid Coverage for People with Mental Health Conditions

Developed by NAMI and the Legal Action Center, the report offers practical guidance to help states prevent coverage losses under new Medicaid work reporting rules.

ARLINGTON, Va., Nov. 3, 2025 /PRNewswire/ -- As federal Medicaid work reporting requirements set to take effect in 2027 move closer to implementation, a new report urges policymakers to act now to protect people with mental health conditions from losing essential health coverage. Developed by the National Alliance on Mental Illness (NAMI) and the Legal Action Center (LAC), Work Reporting Requirements and Mental Health: Recommendations to Protect Individuals with Mental Health Conditions from Losing Medicaid offers a detailed roadmap for strengthening safeguards, reducing administrative barriers, and ensuring continuity of care.

Medicaid is the largest payer of mental health and substance use disorder treatment in this country, so upcoming changes to Medicaid will have an outsized impact on people with mental health conditions. Beginning in 2027, many people covered by Medicaid will need to comply with new work reporting requirements in order to get or retain Medicaid coverage. The new rules introduce complex reporting obligations that many people will struggle to navigate, placing millions of eligible individuals at serious risk of losing their Medicaid coverage because of paperwork barriers and procedural hurdles.

While the law passed this summer has exemptions for individuals who are "medically frail," including people with "disabling mental disorders," the implementation details – still to be finalized – for those exemptions will be critical to preventing people with mental illness from losing their Medicaid coverage.  

"Access to mental health care is the cornerstone of NAMI's mission, which is why we are deeply concerned about people with mental illness falling through the cracks of a complex process as a result of work requirements," said NAMI's Chief Advocacy Officer Hannah Wesolowski. "Too many people with mental health conditions could lose Medicaid due to unnecessary administrative hurdles when they should be protected. This report serves as a roadmap for policymakers to protect people with mental health conditions and reduce these coverage losses."

"Fifteen million non-elderly adult Americans rely on Medicaid for essential mental health and substance use disorder services," added Teresa Miller, National Director of Health Initiatives at LAC. "Building off LAC's seminal report on mitigating the harms of recent federal cuts and changes to Medicaid for especially vulnerable populations, this report offers practical solutions to ensure people with mental health conditions can access the treatment and supports they need without fear of losing coverage. We urge policymakers to heed these recommendations to protect access to affordable, lifesaving care for millions nationwide."

The report outlines three key recommendations for policymakers and advocates to protect individuals with mental health conditions:

• Maximize Identification of Eligible Exemptions,
• Minimize Administrative Burdens for Individuals and Stakeholders, and
• Advance Inclusive Policies to Improve Access to Coverage and Care.

The report also highlights the financial and public health consequences of limiting access to mental health care, noting that untreated conditions can lead to higher costs for states due to increased hospitalizations, emergency visits, and other systemic impacts.

The full report is available for download on NAMI's website.

About NAMI:
The National Alliance on Mental Illness (NAMI) is the nation's largest grassroots mental health organization dedicated to improving the lives of individuals and families affected by mental illness.

About Legal Action Center:
The Legal Action Center (LAC) is a non-profit organization that uses legal and policy strategies to fight discrimination, build health equity, and restore opportunities for people with substance use disorders, mental health conditions, arrest and conviction records, and people living with HIV/AIDS.

SOURCE National Alliance on Mental Illness (NAMI)