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Many adults with serious mental illness (SMI) enrolled in Medicaid aren't receiving enough evidence-based care due to limited public funding. This article describes a clear, practical method for states to measure the funding gap. Using California’s mental health system as an example, we outline four key steps: checking current service use, setting clear care standards, estimating costs per service, and calculating total needs. This approach should help states understand exactly how much more they need to invest for better mental health outcomes.

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This page is a summary of: Estimating the Investment Gap in Treating Serious Mental Illness in the United States, Psychiatric Services, December 2025, American Psychiatric Association,
DOI: 10.1176/appi.ps.20250142.
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