Minnesota addiction and mental health providers fear federal cuts will hurt ‘life-saving’ services

Substance abuse services in schools and a help line intended to prevent people’s mental health issues from escalating are among Minnesota programs scaling back amid an attempt to cancel federal funding.

The Trump administration wants to rescind $27.5 million in COVID-era grants for 85 mental health and addiction programs across the state, according to the Minnesota Department of Human Services.

However, a federal judge temporarily blocked the cuts this month when she ruled in favor of a lawsuit brought by Minnesota, 22 other states and the District of Columbia.

But as the court battle plays out, Minnesota providers said the aid remains on hold, and they are scrambling to piece together funds to sustain services amid widespread financial uncertainty.

“There’s a lot of prayers happening,” said Jode Freyholtz-London, CEO of Wellness in the Woods, which relies on the aid for its peer support connection “warmline.”

Up to 100 Minnesotans call the free line daily to talk with someone who has faced similar challenges, such as mental illness, substance abuse or incarceration, she said.

The service isn’t a crisis line, Freyholtz-London said, but instead helps prevent someone who is struggling from ending up in a worse situation. It’s the only such call line available overnight in Minnesota.

A message at the top of the organization’s website urges people to press lawmakers to restore the funding put on hold in late March.

Wellness in the Woods isn’t shutting down its warmline, Freyholtz-London said, but is operating with a “skeleton crew,” so callers might not be able to reach its staff.

In Forest Lake and Hastings, Canvas Health was using the grant money to embed social workers in school districts. The agency was helping about 60 students who were struggling with substance use or worried about a parent or caregiver’s use.

When the Human Services Department said the funding was terminated, Canvas Health had to stop the free services, organization officials said. They said the abruptness is confusing and stressful for students and staff.

Canvas Health is trying to direct students to services in its clinics, but officials said the program must bill their insurance or have them pay a sliding scale fee.

“I’m really worried about the impacts it has on our communities,” CEO Khu Thao said, noting that not all of the students served by Canvas Health have insurance. “There will be individuals who fall through the cracks.”

In St. Paul, the Wilder Foundation said federal grant cancellations have affected its substance use disorder and mental health services in St. Paul Public Schools.

“Canceling these services directly threatens student and family safety, removing critical messaging on substance abuse risks, overdose signs, and how to get help,” Pahoua Yang, Wilder’s vice president of community mental health and wellness, said in a statement.

“It also impacts our school-based mental health support, a primary point of successful family engagement.”

She said the foundation is monitoring the court challenge to the grant cancellations and hopes funding is restored.

In total, the Trump administration is seeking to claw back $11 billion nationally in public health funding. When it announced the cuts, the U.S. Department of Health and Human Services said it “will no longer waste billions of taxpayer dollars responding to a nonexistent pandemic that Americans moved on from years ago.”

Minnesota Attorney General Keith Ellison and others challenged the move, and a U.S. district judge in Rhode Island said on April 3 that she would grant a temporary restraining order. But the administration quickly brought an emergency motion for reconsideration.

“It will take time to figure out the impacts of these federal actions, especially now that a temporary restraining order (TRO) was issued to restore the federal grants that were abruptly terminated,” Teresa Steinmetz, Minnesota’s assistant human services commissioner, said in a statement.

“While this is a positive step, it is unclear at this moment how much stability the TRO will provide.”

Various Minnesota counties also had been using the grant dollars for mental health or substance abuse services. While this creates challenges to finish up programs, counties had generally spent the majority of the dollars and aren’t as affected, said Matt Freeman, director of the Minnesota Association of County Social Service Administrators.

But he said the move has a chilling effect on innovating or relying on grants to develop programs.

“These are lifesaving and really important services that stabilize and impact people’s lives and so having inconsistent or unreliable funding for it really does impact the folks served,” Freeman said.

The grants from the American Rescue Plan Act of 2021 were expected to end this summer, said Amy Morgan, CEO of Wayside Recovery Center, where $150,000 in remaining federal funding is in jeopardy.

 Wayside was spending the money on nursing, case management and peer recovery support staff to help pregnant and parenting women with opioid use disorder. Morgan said the center won’t change those services but doesn’t know how it would make up lost money. She said Wayside is looking to cut costs.

The potential cancellation of COVID-era funds is one of many changes that have behavioral health providers worried. They are also watching congressional action on Medicaid and state legislative decisions. Providers like Wayside are pressing Minnesota lawmakers, who face a potential budget deficit in a couple of years, to boost the rates for their services.

“More burden will clearly pass to the state should the federal government chose not to invest in these types of programs,” Morgan said. “The need is still there; that won’t go away.”

The fast-unfolding changes have also created confusion.

After the Human Services Department told Vail Communities on April 7 to cease work funded with American Rescue Plan funds, officials thought they would have to close two of their “clubhouses,” said Karina Forrest-Perkins, Vail’s president and executive officer. The clubhouses provide a safe community for people with mental illness and offer free meals as well as employment and education support.

The Minneapolis and St. Paul locations where they were looking at closures serve about 1,000 people, Forrest-Perkins said. It turned out to be a mistake, and Human Services Department said Vail Communities was funded through other sources.

But Steinmetz, the assistant commissioner, said Vail’s contract expires June 30 and while the department offered to explore funding options for another year, federal aid concerns made it unclear what money would be available.

Vail Communities’ clubhouse in Hopkins was bustling Friday as members cooked and distributed cheeseburgers and chatted. People who came from as far as Newport, Northfield and Farmington lined up to share stories about how the program has changed their lives.

One man got a job at Sea Salt Eatery through the clubhouses. Another said the program helped him overcome antisocial behavior and return to college. A woman said it helped her emerge from an abusive situation.

Some people questioned whether they would be here without the community they found at the clubhouses, which they described as nonjudgmental and supportive. Again and again, they said ending the service would be disastrous for those with mental illness.

Nishi Peters of New Brighton said he was “infuriated” when he heard about the funding cut. But he said he wasn’t surprised, given the political climate, and worries the clubhouses might have to close.

He said a mental health services worker told him about the program when he was hospitalized in 2023. Peters said he now comes to the clubhouses several times a week and has found a social circle he didn’t have before.

“Most of the people in this room, in this building, would be absolutely devastated, and they wouldn’t have nowhere to go,” he said.

“Otherwise, they are going to go around and struggle really hard with delusions or meltdowns or whatever they have. This gives an outlet for people to be safe and express themselves.”