02/27/2026
Following the State of the Union address, NAMI Minnesota is deeply alarmed by the Federal Administration’s announcement that it will halt approximately $259 million in Medicaid funding to Minnesota. This decision will disproportionately harm people living with mental illnesses who depend on Medicaid (known as Medical Assistance in Minnesota) for access to treatment, medications, housing supports, and critical community-based services. Medicaid is the largest payer of mental health services in Minnesota.
The majority of Medicaid beneficiaries live in Greater Minnesota, where providers rely heavily on Medicaid reimbursement to keep their doors open. A funding cut of this magnitude will be devastating, particularly in rural communities that already face workforce shortages and limited provider capacity. People living with a mental illness will be forced to travel hours for care—or go without it entirely.
The impact will also be severe in the Twin Cities. Safety-net institutions such as Hennepin Healthcare, one of the state’s primary mental health providers, depend significantly on Medicaid funding. Destabilizing this funding stream threatens inpatient psychiatric beds, crisis stabilization services, and outpatient care.
This cruel announcement comes at a time when communities are experiencing heightened stress and trauma. People living with serious mental illnesses need continuity of care to stabilize, recover, thrive, and contribute meaningfully to their communities—as they consistently do when given the right support. We agree that fraud must always be addressed. However, many of the current allegations have been mischaracterized or politicized. Broad funding freezes that undermine legitimate services do not target fraud; they destabilize vulnerable Minnesotans. Local responses driven by this narrative have already led to harmful consequences, including housing disruptions and service cuts that directly impact people living with mental illnesses. Medicaid is not a political bargaining chip. It is a lifeline.
NAMI Minnesota urges federal and state leaders to reverse this funding halt, pursue targeted and evidence-based oversight measures, and protect the services that allow people living with mental illnesses to access care, recover, and fully participate in their communities.
