President Obama’s 2016 Budget: What Does It Mean for Mental Health?

Feb 20, 2015

President Obama unveiled his $4 trillion budget proposal for 2016. The budget includes a number of important proposals for agencies and programs of importance to people living with serious mental illness and their families. In a surprise development, the budget proposes to eliminate the unfair 190-day lifetime limit on inpatient psychiatric care in the Medicare program, a proposal that requires congressional action.

Perhaps most important is the President’s proposal to increase the current budget limits by $74 billion on spending, thankfully eliminating the looming threat of across-the-board cuts known as “sequestration” for 2016. Back in 2013, sequestration became a reality, with harmful cuts to mental illness research and supportive housing programs. It remains to be seen if Congress will allow this to happen. However, this budget proposal does serve as a first offer in a negotiation over spending limits and priorities that will run through this coming summer.

Read on to see President Obama’s proposed budget in relation to serving people with mental illness.

Mental Illness Research

The President’s budget proposes a $56 million increase for the National Institute of Mental Health (NIMH) – boosting funding from the current 2015 level of $1.434 billion to $1.489 billion. This increase is in line with many of the other 29 institutes and centers at the National Institutes of Health (NIH), which overall is proposed for a $1 billion increase, up to $31.3 billion.

In addition, the budget is proposing an increase of $70 million for a total of $135 million for the Brain Research through Advancing Innovative Neurotechnologies (BRAIN) Initiative. The BRAIN Initiative is a collaborative effort across numerous NIH institutes (including NIMH) and the Department of Defense Advanced Research Projects Agency (DARPA) aimed at accelerating development and application of advanced technologies such neuroimaging and mapping of brain circuits. The budget also proposes a new investment in “Precision Medicine,” which involves matching diagnosis and treatment strategies to each person’s unique molecular makeup. The President is asking for $200 million for this initiative, including $130 million for a National Research Cohort that would have the objective of mapping the individual genome of 1 million clinical trial participants.

Mental Health Services

Under the President’s 2016 budget, the Substance Abuse and Mental Health Services Administration (SAMHSA) would see a $44.6 million increase – boosting overall funding to $3.666 billion. This amount includes:

Supportive Housing

The President’s proposed budget offers a $42 million increase for the U.S. Department of Housing and Urban Development (HUD) Section 811 program which supports the lowest income people with long-term disabilities to live independently in the community. This would boost funding from the current 2015 level of $135 million up to $177 million. This increase would allow $25 million in 2016 to develop new supportive housing units, known Project-Based Rental Assistance (PRA). These housing units would be made available to states through a competitive process tied to efforts to promote community integration as an alternative to restrictive settings such as board and care homes serving people with severe disabilities (including serious mental illness).

The budget proposes $2.48 billion for Homeless Assistance Grants, a $345 million increase over the 2015 level. HUD projects that this increase will allow for development of 25,500 new permanent supportive housing (PSH) units in 2016 and place us back on pace to end chronic homelessness in America by the end of 2017.

The HUD budget also includes a proposal to restore more than 67,000 Section 8 vouchers lost in 2013 as a result of sequestration. Specifically, $492 million is requested for new Section 8 rental vouchers. This would include 22,500 vouchers targeted to veterans and homeless individuals and families. Unfortunately, this proposal does not include people with disabilities as a targeted population.


The President’s budget proposes $73.486 billion for discretionary programs at the U.S. Department of Veterans Affairs (VA) for 2016. The VA funding request is unique in that the agency is NOT subject to the strict caps on discretionary spending put in place in 2011. In addition, the Veterans Health Administration (VHA) is funded by Congress on a two year basis, meaning that this budget proposal includes 2017 “forward funding” request of $66.6 billion. For 2016, the budget projects $63.2 billion for veterans’ medical care, a $4.2 billion increase over 2015. This includes $7.5 billion for mental health care in the VA, a $349 million increase over 2015.

The budget proposes $1.4 billion at the VA for homeless related programs, including support services in the joint VA-HUD VASH program wherein VA provides case management services for at-risk veterans and their families and HUD provides permanent housing through its Housing Choice Voucher program. Between 2010 and 2014, overall veteran homelessness has dropped 33%, and unsheltered veteran homelessness has dropped 46%. In 2015, a number of large U.S. cities have recorded zero homelessness among veterans.

For 2016, the President is requesting $622 million for medical research at the VA.

Finally, the President’s budget also requests $2.7 billion (a $166 million boost over 2015) to improve VA benefits claims processing through technology enhancements and hiring of new claims processors.

Medicare and Medicaid

Both Medicare and Medicaid are mandatory entitlement programs that are not subject to annual appropriations by Congress. However, the President’s budget request always includes proposals to reform both programs and fund demonstrations and pilot programs. For 2016, the President is endorsing an important change to Medicare and ending the current unfair 190-day lifetime limit on inpatient psychiatric care. The budget projects that this will cost $5 billion over 10 years. For years, NAMI has fought to eliminate this unfair limit on inpatient care. This restriction disproportionately impacts non-elderly Medicare beneficiaries – mainly Social Security Disability Insurance (SSDI) beneficiaries living with schizophrenia and bipolar disorder that stay on Medicare longer and are much more likely to run up against the current limit. It is a major step forward for a President to endorse elimination of the 190-day lifetime limit as part of a budget proposal. NAMI will be pushing hard for Congress to move on this proposal in Congress in 2016.

Unfortunately, the President’s budget also includes a proposal from last year’s budget to increase cost sharing in the Medicare Part D drug benefit for low-income and dual eligible beneficiaries. The proposal is designed to encourage higher use of generic medications in Part D. While this includes lowering the cost sharing for generic medications, it also allows for doubling of cost sharing for brand medications and specifically allows the therapeutic substitution to avoid higher cost sharing. It is important to note that this proposal for higher cost sharing would be only forced on beneficiaries below 135% of the federal poverty level and those dually eligible for both Medicare and Medicaid.

For Medicaid, the President’s budget includes expansion of a number of waiver and state option programs designed to promote community integration for people with disabilities and improve coordinated care. Among these are expansion of the current 1915(i) Home and Community-Based Services option program. The 1915(i) program can include services for people with mental illness who qualify such as: day treatment or partial hospitalization, psychosocial rehabilitation, behavioral supports, cognitive rehabilitative therapy, crisis intervention and housing counseling. Under current law, states that participate must limit eligibility for 1915(i) to individuals with disabilities that meet strict criteria. The budget proposes to allow states to expand their criteria and eliminate other administrative burdens. States would also be allowed to offer the full array of Medicaid services to those meeting 1915(i) criteria. The budget also proposes to require covering Early and Periodic Screening, Diagnostic and Treatment (EPSDT) services for children and young adults under age 21 in inpatient psychiatric facilities.

So what happens next? Both the U.S. House of Representatives and the U.S. Senate will be working on their proposed budgets. They will then come together to work out the differences in their budgets before it is sent back to the President. Sign up to receive NAMI Action Alerts to stay informed and advocate for mental health to Congress and the White House.


Contributions from Jessica W. Hart.

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