Debate Over Federal Regulations and Mental Health Care for the Homeless

Democrats are opposing efforts by the Trump administration to revise the regulations concerning the mental health treatment of 146,000 homeless individuals with serious mental illnesses. In July, House and Senate Democrats began an inquiry, suggesting the administration’s actions might result in a regression of disability rights. However, the existing system they defend contributes to the large number of mentally ill people living on American streets.

For many years, states were limited in assisting homeless individuals with mental illness. Government lawyers had interpreted the Supreme Court’s 1999 Olmstead decision broadly, demanding ‘community-based care.’ This often meant independent living, where treatment wasn’t mandatory, and many refused it. To address this, the Department of Justice issued a legal opinion in June to reform federal oversight.

The Trump administration proposed small-scale, community-based group homes that provide court-ordered treatment for disabled individuals with mental illnesses or substance issues.

Historically, these intermediate housing options have been hard to establish due to regulations that prioritize autonomy over safety and clinical needs. This left states struggling to fill the gap between hospitalization and community care. Now, states might address this need, which had been overlooked for decades.

The new framework doesn’t suggest returning to large state psychiatric hospitals, which are costly, averaging $1,400 per day per patient, and offer limited federal reimbursement. Some activist groups argue that the policy changes might revert to outdated practices of warehousing people, conjuring images of past asylums. However, the current system’s conditions, where the homeless live in dangerous encampments, are often ignored.

Mental illness and addiction among the homeless are urgent issues. Many individuals with severe mental disorders or substance-use issues live outdoors, posing risks to themselves and the public. They experience high victimization, crime, disease, and premature death. Despite needing help, this group resists outreach due to mental illness affecting their reasoning.

Since 1992, federal regulations have heavily influenced state behavioral health systems, demanding states focus on voluntary mental healthcare. This care is insufficient for those with severe illnesses needing daily support that solo living doesn’t offer.

States face challenging decisions: adhere to federal laws and neglect severely ill patients or provide necessary care and risk litigation. Many states, having faced court losses, choose compliance. Before the DOJ memo, states created ‘Olmstead Plans’ to reduce psychiatric hospital populations, regardless of patient well-being or public safety.

From 1990, psychiatric hospital beds dropped drastically. By 2016, fewer than 38,000 beds remained, a 96% drop since the 1950s, while the U.S. population grew by 110%. Protection and advocacy agencies shifted from investigating institutional abuses to pressuring hospitals into releasing patients, some falling into homelessness or jails due to inappropriate releases.

In the Olmstead ruling, Justices Kennedy and Breyer cautioned against moving institutionalized patients inappropriately, foreseeing potential issues. While policies freed individuals from hospitals, they often led to poor living conditions equating to the world’s poorest areas.

Institutional abuses existed, and advocates helped end many of these issues. Learning from past mistakes shouldn’t neglect current evidence: the system meant to avoid harm now leaves many untreated on streets. The Trump administration’s review of regulations is overdue, addressing these long-standing issues.

Dr. Elinore McCance-Katz is a psychiatrist, senior fellow at the Cicero Institute, and former assistant secretary for Mental Health and Substance Abuse at the U.S. Department of Health and Human Services.