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September 14, 2026
Quarterly Article
Brendan Saloner
Yngvild Olsen
Jul 29, 2026
June 2026
Mental Health and Substance Use Challenges
Back to The Milbank Quarterly
Policy Points:
Context: State governments play a central role in the delivery of substance use care in the United States, which has a profound impact on public health. Their role has grown substantially over time, as they have assumed more functions and confronted an unprecedented drug overdose crisis. While states have a wide array of regulatory and financing tools, they are confronting both longstanding challenges coordinating services and new headwinds from federal policy.
Methods: We examine historical and recent case studies in state substance use policy and synthesize key lessons.
Findings: States have undergone a massive transformation since the Affordable Care Act in their financing, but treatment services mostly remain segregated from general health care and partnerships across agencies remains a challenge. We highlight promising examples where states have pioneered new approaches to oversight, quality of care, or standards.
Conclusions: Anticipated budgetary pressures, including the impact of the “One Big Beautiful Bill” on Medicaid funding, will put further pressure on states to innovate, but also place major gains—such as the recent decline in overdose deaths—at risk.