How State-Level Reforms Are Changing Behavioral Health Care in The United States

About one in five American adults, or, in other words, more than 50 million people, experience a mental health condition each year. However, 60% of these people receive no mental health treatment at all.¹

This gap is also not evenly distributed. Whether or not you can get behavioral health care in the country often depends on where you live, how you live, how much you earn, and your ethnicity.

It is unrealistic to expect the entire country to run on a central behavioral health policy. The challenges facing a rural county with one clinic are nothing like those in a dense urban area with overwhelmed emergency departments.

Therefore, it is upon the states to see where the system needs to be supported. States control many of the levers that affect behavioral care delivery, workforce rules, and payment structures.

In this blog post, we discuss recent state-level reforms that aim to improve access to behavioral health care in the United States. 

The Need for State Mental Health System Reforms

It is estimated that around 47% of the population, or 160 million individuals, in the US live in areas designated as “mental health workforce shortage regions.”² But it is one thing to read this information on paper, and another thing entirely when you hear families tell you they couldn’t find any psychiatrist within hundreds of miles.

In rural corners, the situation is even worse because 65% or more of these counties lack any psychiatrists to begin with.³ There is a dire need to fill this gap by incentivizing behavioral health clinicians to work in underserved areas and to implement policies that allow anyone to reach any health facility from anywhere.

The good news is that several states in the US have implemented specific reforms to meet these needs. Next, we’ll take a look at what these reforms are.

6 State-Level Reforms Improving Behavioral Health Care

We can divide the reforms introduced at a state level into six major categories. These are: 

1. To make behavioral health jobs more sustainable in the long-term
2. Target uneven spread of providers by using incentives and training pathways to bring care into underserved communities
3. That states should work in direct contact with clinicians, educators, and community organizations
4. To update the outdated rules so that qualified professionals can use their full skill set
5. Expand telehealth access and remove geographic barriers to behavioral health care
6. Build a workforce that reflects the cultural, racial, and lived experiences of the communities it serves

Let’s dive into the details.

1. Workforce Recruitment and Retention

Without the right people in the field, no new healthcare policy ideas will ever become accessible. Therefore, many states are putting real money on the table in how behavioral health care is paid for. 

Between 2023 and 2025, more than 30 states raised Medicaid behavioral health reimbursement rates, since it pays for the largest share of behavioral health services.

Michigan’s 2023–2024 budget included $364 million for behavioral health, with an additional $5 million for scholarships for students pursuing behavioral health careers.⁴ The state also introduced another $5 million to expand the Michigan Crisis and Access Line, which operates 24/7.

Additionally, Texas recently increased salaries in state hospitals and introduced reforms to support loan repayment.

Healthcare payment reforms have also delivered workforce gains. In Iowa, a $10 million Medicaid investment in 2023 led to a 96.5% increase in billing for substance use treatment services. In Maine, payment rates for more than 115 behavioral health services were updated in 2023.⁵

2. Addressing Shortages and Maldistributions in the Workforce

A major problem among behavioral health providers in the United States is that they are unevenly spread across the country. Therefore, many state-level reforms have been introduced to improve health access in underserved populations.

For instance, Michigan and Pennsylvania have expanded their loan repayment programs to prioritize behavioral health clinicians who commit to working in underserved areas. 

Georgia’s Behavioral Health Provider Student Loan Repayment Program offers between $10,000 and $150,000 in loan repayment in exchange for a four-year full-time commitment serving Medicaid recipients.⁶

The Oregon Health Authority has created the United We Heal program to cover additional Medicaid funds for apprenticeship and training costs among qualifying behavioral health providers.⁷

Further, Arizona, New Jersey, and Washington have invested in scholarships and grants for behavioral health students coming from rural communities to reduce financial barriers.

3. Partnering With Behavioral Health Professionals

State-level reforms must be designed with educators, providers, and community groups on board so that everyone in the system is on the same page.

Academic partnerships are the most common route for policymakers to be in contact with behavioral health providers. 

Missouri’s Associate of Applied Science in Behavioral Health Support program, for example, was built jointly by state agencies, community colleges, and the mental health sector. 

New York linked state agencies with the State University of New York to promote addiction studies degrees, then added paid, part-time internships through the SUNY and the Office of Mental Health scholarship pipeline.

Policymakers are also investing in training sites. Florida’s Center for Behavioral Health Workforce supports training clinicians through the TEACH program.⁸ Other states, including Nebraska, Illinois, and Ohio, have implemented similar reforms, too.

New Hampshire also offers a Bachelor of Arts in Community Mental Health with paid co-ops at $20 an hour at mental health facilities.⁹

4. Modernizing the Scope of Practice

Modern behavioral health practice is built on evidence-based medicine rather than outdated rules that no longer match today’s workforce. Based on this, many states have realized that underused skills or long licensure bottlenecks are common reasons for behavioral health shortages.

Therefore, several states have removed barriers that slow the entry or reentry of clinicians into the field. Colorado updated licensure requirements for mental health professionals by eliminating the social work licensing exam. The state also reopened doors for professionals with expired registrations who can now reapply through continuing professional development.

Hawaii established associate-level licensure for marriage and family therapists, mental health counselors, and psychologists. For psychologists, the state now permits people with provisional licenses to sit for the licensing exam before completing all supervised hours.

Additionally, Utah created a prescribing psychologist certification that enables specially trained psychologists to prescribe selective serotonin reuptake inhibitors. The policy has expanded health access in areas with limited psychiatric coverage. 

5. Telehealth Services

During the COVID-19 public health emergency, several states temporarily stripped away location rules so that people could receive behavioral health care from their homes. Naturally, telehealth access led to a drop in missed appointments, and it allowed rural communities to connect with clinicians they would otherwise never be able to reach.

Since then, states have moved to lock in permanent telehealth policies that expand behavioral health access well beyond crisis conditions.

As of recent years, 36 states have adopted licensure exceptions, and 20 have created formal telehealth registration processes for out-of-state providers.¹⁰ Several states also require insurers to cover telemedicine for mental health and substance use treatment at the same level as in-person services.

In addition, Idaho introduced the Telehealth Access Act. It expands coverage for mental and behavioral health services delivered by providers who are not licensed in Idaho, as long as they meet established standards.

In 2023, Arkansas, Virginia, Wyoming, and 11 additional states joined the Counseling Compact to allow licensed counselors to practice across state lines and use telehealth more easily. 

6. Diversity in Behavioral Health Workforce

When the workforce does not reflect the communities it serves, people often do not feel like they are understood by their clinicians. Cultural or language differences are major hurdles to accessible behavioral health care.

In Wisconsin, the Department of Health Services awarded $1 million in grants to ten organizations.¹¹ These grants are directed towards building a culturally responsive behavioral health workforce.

Further, Minnesota has taken a mentorship-driven approach by funding mental health providers of color and those from underrepresented communities to qualify as supervisors. 

Behavioral Health Care at Mission Connection Healthcare

Mission Connection Healthcare proudly operates at the quality of behavioral health care expected through modern state-level reforms. 

We currently serve people in Washington, California, and Virginia and deliver both telehealth and in-person care. Our treatment centre fully aligns with each state’s workforce, licensing, and access requirements.

Every clinician on our team holds full licensure in the state where they practice. These include licensed marriage and family therapists, licensed clinical social workers, and licensed clinical psychologists.

Our model reflects where state policy is headed. The telehealth services are meant to improve healthcare access for people who might otherwise face long drives. We also offer insurance verification from all major insurers that cover telehealth services at the same level as in-person care.

For more information on our inclusive care, reach out to us today.

References

1. National Institute of Mental Health. (2024, September). Mental Illness. National Institute of Mental Health. https://www.nimh.nih.gov/health/statistics/mental-illness
2. Counts, N. (2023, May 18). Understanding the U.S. Behavioral Health Workforce Shortage. The Commonwealth Fund. https://www.commonwealthfund.org/publications/explainer/2023/may/understanding-us-behavioral-health-workforce-shortage
3. Mental Health America. (2024). Rural Mental Health Crisis | Mental Health America. Mental Health America. https://mhanational.org/resources/rural-mental-health-crisis/
4. Michigan Department of Health and Human Services. (2023, July 31). MDHHS director, health leaders discuss state’s commitment to behavioral health service access for Michigan families through nearly $364 million in budget investments. Michigan.gov. https://www.michigan.gov/mdhhs/inside-mdhhs/newsroom/2023/07/31/budget-roundtable
5. McCullough, T. (2025, February 17). Trends in State Strategies to Improve the Behavioral Health Workforce – NASHP. NASHP. https://nashp.org/trends-in-state-strategies-to-improve-the-behavioral-health-workforce/
6. Georgia Board of Health Care Workforce. (2024). Georgia Behavioral Health Provider Loan Repayment Program. https://healthcareworkforce.georgia.gov/georgia-behavioral-health-provider-loan-repayment-program
7. United We Heal. (2024, July). Home. https://oregonuwh.org/
8. Florida Center for Behavioral Health Workforce. (n.d.). Home – Florida Center for Behavioral Health Workforce. https://fcbhw.org/
9. New England College. (n.d.). Community mental health [Program information]. NewEnglandCollege.edu. https://www.nec.edu/communitymentalhealth
10. CCHP. (n.d.). State Telehealth Policies for Out of State Providers. https://www.cchpca.org/topic/out-of-state-providers/
11. Staff, W. (2023, February 27). 1M in grants awarded to increase access to mental health, substance use care. WEAU. https://www.weau.com/2023/02/27/gov-evers-dhs-awards-1m-grants-increase-access-mental-health-substance-use-care/