U.S. Department of Health and Human Services FY 2027 Budget Proposal

The White House's proposed FY 2027 budget for the Department of Health and Human Services (HHS) requests $111.1 billion in discretionary funding—a 12.5% ($15.8 billion) reduction from the 2026 enacted level. The proposal aims to refocus the department on core missions, reduce inefficiencies, and reorganize agency structures through the creation of a new Administration for a Healthy America (AHA).

Key Funding Changes:

• Overall HHS reduction: $15.8 billion (12.5% cut)
• National Institutes of Health (NIH) funding: $5 billion reduction
• Behavioral health workforce: $788 million in discretionary funding (with some increases, some eliminations)
• 988 Suicide & Crisis Lifeline: $535 million (maintained)

The proposal was released on April 3. However, Congress holds final authority over federal spending allocations. In January 2026, Congress rejected the prior year's proposed cuts, instead providing HHS $116.8 billion—$33 billion more than the administration requested for FY 2026.

AGENCY REORGANIZATION: ADMINISTRATION FOR A HEALTHY AMERICA

The budget proposes consolidating the Substance Abuse and Mental Health Services Administration (SAMHSA), Health Resources and Services Administration (HRSA), Office of the Assistant Secretary for Health (OASH), and selected Centers for Disease Control (CDC) programs into a new Administration for a Healthy America (AHA). This reorganization would focus on:

• mental health and substance use disorder services
• primary care
• maternal and child health
• workforce development

Within AHA, the budget allocates $6.7 billion ($576 million cut) for mental health and substance use disorder services, proposing two new programs: the Behavioral Health Innovation Block Grant and Behavioral Health and Substance Use Disorder services for Native Americans.

BEHAVIORAL HEALTH WORKFORCE DEVELOPMENT

The budget allocates $788 million in discretionary funding for health workforce programs, including:

• National Health Service Corps: $130 million (approximately 1,300 new loan repayment awards for behavioral health clinicians serving health professional shortage areas)
• Behavioral Health Workforce Education and Training Program: Part of $129 million in workforce development
• Addiction Medicine Fellowship Program: Included in workforce development funding
• Substance Use Disorder Treatment and Recovery Loan Repayment Program: Included in workforce development funding

CRISIS SERVICES AND SUICIDE PREVENTION—FUNDING MAINTAINED

The budget maintains critical funding for crisis and suicide prevention:

• 988 Suicide & Crisis Lifeline: $535 million (unchanged)
• National Strategy for Suicide Prevention: $30 million
• Garrett Lee Smith Youth Suicide Prevention: $56 million (plus $11 million Resource Center)
• American Indian/Alaska Native Suicide Prevention: $5 million

The 988 Lifeline has demonstrated success, reducing average response times to 35 seconds and responding to anticipated 11 million contacts in FY 2027.

CHILD AND ADOLESCENT MENTAL HEALTH—FUNDING MAINTAINED

The budget maintains support for children's mental health:

• Project AWARE: $121 million
• National Child Traumatic Stress Network: $101 million
• Children's Mental Health: $132 million

SERIOUS MENTAL ILLNESS AND COMMUNITY-BASED SERVICES

The budget provides funding for individuals with serious mental illness:

• Projects for Assistance in Transition from Homelessness (PATH): $67 million
• Assisted Outpatient Treatment: $21 million
• Certified Community Behavioral Health Clinics: $385 million

THE SIGNIFICANT CUT: MINORITY FELLOWSHIP PROGRAM

The budget proposes eliminating all funding for the Minority Fellowship Program, listed among “Programs Proposed for Elimination.” The rationale characterizes the program as duplicative or too small to have national impact.

However, strong bipartisan congressional support exists for the Minority Fellowship Program, and Congress rejected a similar proposal last year.

THREE KEY IMPLICATIONS FOR MENTAL HEALTH COUNSELORS

IMPLICATION 1: Workforce Development Funding Remains—But Minority Fellowship Program at Risk

The Good News: The budget maintains $788 million for behavioral health workforce development, including loan repayment programs and training initiatives. This signals continued federal commitment to expanding the mental health workforce.

The Concern: Eliminating the Minority Fellowship Program (MFP) threatens the mental health profession pipeline. The MFP specifically supports students most likely to serve underserved communities. Loss of MFP funding threatens the ability to build mental health services in communities that have historically faced barriers to access. Counselors with lived experience in underserved communities are essential to building trust and effective services in those populations.

Counselor Action: Mental Health Counselors should advocate for MFP retention. MFP-supported Counselors bring essential experience to underserved populations. Losing this program means fewer Counselors entering the profession, perpetuating declines in mental health access.

IMPLICATION 2: Block Grant Consolidation May Reduce Funding Clarity and Accountability for Mental Health Services

The Concern: The budget consolidates various behavioral health block grants into a single $4.1 billion Behavioral Health Innovation Block Grant. While consolidation can increase administrative efficiency, it may also:

• reduce funding transparency for specific mental health services.
• allow states flexibility that could reduce Counselor-specific services.
• create competition among behavioral health professions for limited block grant funding.
• make it harder to track funding for Counseling-specific programs.

Additionally, reorganizing SAMHSA and related programs into AHA creates administrative uncertainty about which agency oversees behavioral health workforce standards, Counselor training programs, and licensing issues.

Counselor Action: Monitor state-level block grant allocations to ensure Mental Health Counseling services and training programs receive adequate funding. Engage with state agencies implementing the new Behavioral Health Innovation Block Grant to ensure Counselors are prioritized in funding distribution.

IMPLICATION 3: 988 Crisis Lifeline Maintenance Signals System Reliance on Counselors

The Positive: Maintaining $535 million for 988 demonstrates federal commitment to crisis services. With 11 million anticipated contacts and 35-second average response times, the system is functioning well.

The Reality: 988 depends heavily on Mental Health Counselors and Crisis Counselors to answer calls and provide crisis intervention. However, the budget doesn't specify increased funding for call center counselor salaries or training. Federal investment in 988 infrastructure without corresponding investment in counselor compensation creates sustainability challenges. Crisis centers struggle to recruit and retain counselors at current pay rates.

Counselor Action: Advocate for 988 funding that includes adequate compensation for Crisis Counselors. Without competitive salaries, the system cannot sustain the workforce it depends on, risking service quality and response times.

CONGRESSIONAL OUTLOOK

Following the submission of the President’s Fiscal Year 2027 budget request to Congress on April 3, the process moves into the legislative stage, where Congress will review, amend, and ultimately decide on spending levels.

Immediate next steps in the budget process include:

• Committee Hearings and Analysis: Congressional committees, particularly the House and Senate Budget and Appropriations Committees, will hold hearings to review the White House proposal. The Congressional Budget Office (CBO) will submit a report on the economic outlook within 6 weeks.
• Budget Committees Reports: The House and Senate Budget Committees are tasked with reporting a concurrent resolution on the budget to their respective floors, setting overall HHS spending limits.
• Congress faces several competing priorities when it returns—Department of Homeland Security (DHS) and Immigration and Customs Enforcement (ICE) funding decisions, Iran war funding, and other major appropriations. The FY 2027 appropriations process is significantly behind schedule, making a continuing resolution (CR) likely this election year. Given these priorities and delays, do not expect congressional action on the 2027 HHS budget proposal in the near term.

Congress rejected similar White House budget proposals last year, providing HHS with $33 billion more than requested. The Minority Fellowship Program faces potential elimination but has strong bipartisan support, making congressional retention possible. NBCC will closely monitor congressional budget deliberations and advocate for funding for programs that ensure access to counseling, education for counselors and the mental health workforce, and mental health care are as widely available as possible, including for the following: 

1. Minority Fellowship Program retention
2. Medicare reimbursement increases
3. 988 crisis Counselor compensation and training
4. behavioral health workforce development focused on Counseling
5. clear funding pathways for Mental Health Counseling services