The Trump administration is reversing widespread cuts to federal grants that support community-based mental health and addiction services across the country, a federal official confirmed to NPR News late Jan. 14.
On Jan. 13, the Substance Abuse and Mental Health Services Administration — a division of HHS — sent grant termination letters to hundreds of recipients, according to a story first reported by NPR, which was based on interviews with nonprofit recipients and copies of two termination notices obtained by the news outlet.
Nonprofit groups told NPR they believe more than 2,000 grants were being canceled, amounting to more than $2 billion. Many grant recipients provide street-level care to individuals experiencing substance use disorder, mental health conditions and homelessness, according to the report.
The move sparked outcry from lawmakers and leaders at nonprofit organizations that provide day-to-day mental health and addiction care, who warned the abrupt loss of funding could leave vulnerable populations without access to critical services. Cuts of that scale could have led to significant downstream effects on hospitals, with more individuals turning to emergency departments for preventable behavioral health crises.
“After national outrage, Secretary Kennedy has bowed to public pressure and reinstated $2 billion in SAMHSA grants that save lives. These are cuts he should not have issued in the first place,” Rep. Rosa DeLauro, D-Conn., said in a statement.
An administration official confirmed to Becker’s Jan. 15 that the grants were being restored. Editor’s note: This story originally ran in the Jan. 15 Becker’s Hospital Review newsletter edition, which was sent before news broke that HHS reversed course and reinstated the grants.
Three more federal health updates:
1. Senate targets late January for ACA subsidy bill: A bipartisan group of senators working on a two-year extension of enhanced ACA tax credits now expects to release legislative text by the end of January, after previously aiming to have a draft ready by Jan. 12, according to a Jan. 13 Politico report.
The proposal would reinstate the subsidies that expired at the end of 2025 and add new limits, including an income cap around 700% of the federal poverty level, a $5 minimum monthly premium, and penalties for insurers that enroll individuals in subsidized plans without their knowledge. Lawmakers are also weighing whether to allow recipients to redirect subsidy dollars to health savings accounts in the second year of the extension.
The House of Representatives passed a three-year extension Jan. 8, but the measure is unlikely to advance in the Senate. Meanwhile, CMS data released Jan. 12 show marketplace enrollment is down 3.4% compared to last year, prompting several states to extend open enrollment or offer temporary financial relief.
2. Trump to release healthcare affordability framework: President Donald Trump plans to unveil a framework to lower healthcare costs this week, he said during a Jan. 13 speech at the Detroit Economic Club.
“Later this week, I’ll announce our healthcare affordability framework that will reduce premiums for millions, lower drug prices, [deliver] price transparency, and demand honesty and accountability from insurance companies all over the country, all over the world, actually,” President Trump said. “Healthcare costs will come down very fast with my Most-Favored-Nation executive order.”
During the one-hour speech, the president also reiterated support for sending federal health funding directly to individuals through health savings accounts — an idea he first shared in November.
“I want the money — those big amounts of money paid for by the government — to go directly to the people so they can buy the healthcare that’s right for them,” he said. “They can negotiate their own deal, healthcare savings account, but they’ll buy their own healthcare.”
The forthcoming plan builds on a string of recent drug pricing agreements between the administration and major pharmaceutical manufacturers, including Johnson & Johnson, Pfizer, Eli Lilly, AstraZeneca and Novo Nordisk. Under the deals, drugmakers have agreed to offer lower prices directly to consumers through the TrumpRx platform, expected to launch in 2026, bypassing pharmacy benefit managers. In return, participating companies are exempt from tariffs. The pricing model is tied to a “most-favored-nation” benchmark, aiming to bring U.S. drug costs in line with prices in other developed countries.
3. HHS adds new members to vaccine advisory panel: HHS Secretary Robert F. Kennedy Jr. appointed two OB-GYNs — Adam Urato, MD, and Kimberly Biss, MD — to the CDC’s Advisory Committee on Immunization Practices, according to a Jan. 13 news release.
The appointments are the latest in a sweeping reorganization of the influential panel, which began in June when Mr. Kennedy removed all 17 of its standing members. Since then, HHS has named about a dozen new members, several of whom have a history of expressing anti-vaccine rhetoric.
The ACIP advises the CDC on vaccine recommendations. While the group’s recommendations are nonbinding, they often shape federal and state immunization guidance, as well as insurers’ coverage decisions. The new ACIP appointments come amid broader changes to federal vaccine policy. On Jan. 5, the CDC announced it was revising the childhood immunization schedule, reducing the number of routinely recommended vaccines from 18 to 11. The update was made without input from the advisory committee.
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