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Rural Health Information Hub

Mental Health Funding

One of the ways to create a sustainable mental health program is to ensure the program has continued funding. There are various forms of funding for rural mental health programming. Some of the most common are listed below.

Federal Funding

Federal agencies are important sources of funding for rural mental health programs. Mental health services are funded by the federal government in the following ways:

  • Through direct provision of services, such as services provided in U.S. Department of Veterans Affairs and the Indian Health Service facilities
  • As the payer of services, through programs such as Medicare, Medicaid, and Children's Health Insurance Program (CHIP)
  • Through grant programs, such as the numerous programs administered through the U.S. Department of Health and Human Services

For many rural health programs, Medicaid is a substantial insurer for patients, and these payments deliver necessary reimbursement to providers. In fact, Medicaid is the largest payer for mental health services across the country. Medicaid funding is a joint effort by states and the federal government and requires sustained support from both levels. The federal government may also provide sustained mental health program funding to states through Mental Health Block Grants (MHBG) from the Substance Abuse and Mental Health Services Administration (SAMHSA).

If rural mental health programs are interested in conducting mental health research or partnering with researchers to provide evidence for the effectiveness of rural mental health programming, the National Institute of Mental Health, part of the U.S. Department of Health and Human Services, offers funding opportunities.

State Funding

State funding varies dramatically across the country, and some states may be more involved than others in funding mental health programs and organizations. However, all states offer some funding for mental health services through the Medicaid program, in conjunction with the federal government. Advocacy and nonprofit organizations, such as the National Alliance on Mental Illness (NAMI) and the National Association of State Mental Health Program Directors (NASMHPD) often advocate for state mental health funding, which may help create sustainable rural mental health programs.

Other Funding Sources

In order to ensure sustainable mental health programming, rural communities should consider securing funding beyond federal and state dollars. There are various avenues for this, including securing private health insurance reimbursement for services, collaborating with other organizations to consolidate and leverage resources, and seeking philanthropic support. RHIhub lists several potential funding mechanisms for rural mental health programming.

Resources to Learn More

The Federal and State Role in Mental Health
Describes the different roles federal and states play in mental health, specifically highlighting mental health funding.
Organization(s): Mental Health America (MHA)

Outlines funding opportunities for mental health programs.
Organization(s): National Institute of Mental Health (NIMH)

National Alliance on Mental Illness (NAMI)
NAMI is a national organization that rural communities can partner with to advocate for sustained mental health program funding.

National Association of State Mental Health Program Directors
The National Association of State Mental Health Program Directors (NASMHPD) works for mental health care on behalf of states and oversees mental health block grants within states.