Alliance Alert: The New York State Office of Mental Health (OMH) has released a detailed update on how the state plans to respond to the deep and sweeping federal cuts enacted in the July Congressional Budget Reconciliation Bill. These unprecedented reductions to Medicaid eligibility, SNAP benefits, and critical mental health funding will have serious consequences for millions of New Yorkers, including the individuals, families, and providers in our mental health system.
Governor Hochul has directed state agencies to develop strategies to limit the damage, and OMH will be hosting regional planning meetings with counties, providers, advocates, and service recipients to identify solutions. The state is also pursuing multiple legal challenges to block harmful funding terminations and protect vital programs.
The Alliance will continue to work closely with state partners and community stakeholders to ensure that recovery-oriented, person-centered services remain available to all who need them. As part of our upcoming conference, we will have multiple workshops and keynotes focused on responding to federal budget changes—including strategies for sustaining programs and protecting essential benefits at the state level. We are also excited to host a special town hall session with OMH Commissioner Dr. Ann Sullivan to discuss the state’s response, answer questions, and hear directly from our community.
Unbreakable! Harnessing Our Power, Building Our Resilience, Inspiring Hope and Courage
Alliance for Rights and Recovery 43rd Annual Conference
Villa Roma Resort and Conference Center | September 29-October 1, 2025
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These budget cuts threaten to destabilize our mental health system, but together, through strong advocacy, collaboration, and innovation, we can protect essential services and continue to advance recovery for all New Yorkers. Together, we can push for policies that put people before politics and safeguard the supports our communities need to thrive.
Facing Challenges: Responding to Cuts Under The New Federal Budget
New York State Office of Mental Health (OMH) | OMH News | August 2025
The Congressional Budget Reconciliation Bill that was signed into law in July has many in New York’s mental health care community anxious as OMH evaluates the impact it will have.
OMH already knows that these cuts will have a broad-reaching impact on Medicaid eligibility and funding for programs and institutions that rely on its reimbursements. This will likely have both immediate and long-term consequences for many of the programs OMH oversees.
Strategies to minimize impact
Governor Kathy Hochul has directed state agencies to prepare comprehensive strategies to help limit the long-term damage to vital programs facing federal cuts.
OMH is committed to minimizing the impact to our behavioral healthcare system, provider networks, Local Government Units, and individuals receiving mental health services. It will also seek opportunities to increase efficiency and decrease burdens on our system of care.
OMH will soon hold regional planning meetings with counties, providers, advocacy groups, and service recipients to develop strategies for addressing increasing need in response to the changing federal land scape. OMH will also hold meetings for the public to learn more about recent federal developments and potential impact on OMH programs and funding.
Questions and suggestions can be sub mitted at any time by e-mail to: planning@omh.ny.gov.
OMH urges cooperation, focus on strengths
“We’ve encountered formidable challenges before, and we’ve always been able to overcome them by relying on the strength of our collective partnerships,” said OMH Com missioner Dr. Ann Sullivan, in a video town hall on July 21 with mental health providers and advocates.
The Commissioner and OMH leadership are conducting a series of video town halls to discuss the impact of recent federal actions and how the state can provide support during this challenging time.
“Our strength rests in the unrivaled talent and commitment of our agency’s workforce,” she added. “I have full confidence in our ability to continue delivering high-quality mental health care throughout our state.”
She noted that New York State has a champion in Governor Hochul, who is deeply committed to strengthening our state’s mental health system and advocating for the rights of all New Yorkers to have access to this care. “Under her leadership, we have seen unprecedented investments in mental health care throughout our state,” the Commissioner said.
“As always, please accept our heartfelt thanks for all that you do and your dedication to the people we serve,” she said. “We’re proud to be standing with you during these uncertain times. I believe we are all stalwart in our commitment to promoting mental health for all New Yorkers and providing hope and recovery for anyone living with mental illness.”
“Together, we will continue valuing diversity and serving our state equitably,” she added. “Most of all, we will continue to support those living with mental illness, their families, our providers, counties, and countless other stakeholders.”
By the numbers: Potential impact on New York State of recent federal actions
- 2 million New Yorkers could lose current insurance coverage.
- SNAP benefits in jeopardy for nearly 3 million New Yorkers.
- 300,000+ households projected to lose some/all SNAP benefits.
- 41,000 noncitizens expected to lose all benefits.
- Combined fiscal impact for New York State: $14 billion annually
Joining in the state’s legal challenges
To date, New York State, through the Attorney General’s office, has brought several lawsuits:
- SAMHSA Grants: Challenging the termination of U.S. Substance Abuse and Mental Health Services Administration COVID-related grants, winning a permanent injunction to restore funding.
- Mental Health Research Grants: Suing over National Institutes of Health grant cuts targeting Diversity, Equity, and Inclusion and LGBTQ research, resulting in a court ruling voiding the cuts.
- School Mental Health Services: In July 2025, the Attorney General sued the U.S. Department of Education over the termination of over $1 billion in school-based mental health funding, arguing it was unlawful and harmful to students.
- Essential Services Grants: In June 2025, part of a challenge of the administration’s cuts to billions of dollars in grants supporting law enforcement, environmental protection, food assistance, and other essential services.
- ACA Amendments: In July 2025, challenging the final rule introduced by the Centers for Medicare and Medicaid Services to amend marketplace coverage, including stricter verification requirements for eligibility, shortened open enrollment periods, and eliminating coverage for gender affirming care as an essential health benefit
See the attached pdf or click here to see the full summer newsletter from OMH.
