"California’s groundbreaking plan to fund on-campus mental healthcare through insurance reimbursements is facing significant delays and administrative complexities, leaving schools struggling to access promised revenue and threatening the sustainability of vital student support services."
California’s ambitious initiative, designed to revolutionize youth mental healthcare by enabling schools to bill insurance companies for on-campus behavioral services, is encountering a challenging reality. Launched with significant fanfare and substantial investment, the program, intended to be a lifeline for students in need, is bogged down by bureaucratic obstacles, inadequate infrastructure, and a lack of clear guidance from the state. This has resulted in a trickle of reimbursements, far below expectations, jeopardizing the long-term viability of crucial mental health support systems established in schools across the state, particularly impacting rural districts with limited resources.
A Promise of Accessible Care, A Reality of Bureaucratic Delays
The vision behind Governor Gavin Newsom’s Children and Youth Behavioral Health Initiative (CYBHI) was transformative: to embed mental health services directly within educational settings, making them readily accessible to all students, regardless of their family’s ability to afford private therapy. With 1 in 10 high school students nationwide having attempted suicide in 2021, the initiative aimed to address a burgeoning mental health crisis exacerbated by the COVID-19 pandemic. The state pledged a $4.4 billion "Master Plan for Kids’ Mental Health," a comprehensive overhaul of the behavioral health system. A significant portion of this funding was earmarked for workforce development, partnerships, grants, and digital platforms, with a core component focused on enabling schools to bill health insurers for services rendered on campus, thereby creating a sustainable funding stream.
However, five years after its conceptualization and several years into its implementation, many of California’s public schools, community colleges, and universities are finding the path to reimbursement fraught with difficulties. Taletha Washburn, executive director of Plumas Charter School in Quincy, California, exemplifies the frustration. Her school spent two years navigating state webinars, completing extensive paperwork, and researching electronic health record systems, only to face months of silence when seeking state assistance. "We spent two years spinning our wheels," Washburn stated, highlighting the arduous preparation process. The school finally received its first reimbursement check in April, totaling a mere $8,000, with at least $12,000 in outstanding claims. For a program Washburn believed could be a "game changer" in her rural community, the experience has been profoundly disappointing.
The challenges are systemic and widespread. Across the state, roughly 1,000 educational institutions are participating in the billing program. Yet, more than half of California’s school systems and colleges have not enrolled, and among those that have, fewer than one-fifth had filed any claims as of June 1, according to the Department of Health Care Services (DHCS). This low participation rate and minimal claim submission stand in stark contrast to the projected half-billion dollars in annual revenue that schools were led to believe the program could generate to cover the costs of counselors, therapists, and wellness coaches. Many of these positions were initially filled using substantial, but temporary, federal COVID-19 relief funds. The inability of the reimbursement program to materialize as expected has led to widespread layoffs, with thousands of educators and mental health professionals receiving pink slips amid local budget cuts.
A Groundbreaking Initiative Hampered by Execution
State lawmaker Dawn Addis, a former special education teacher, has been a vocal critic of the program’s slow rollout. "One of the things that makes people hate government is when we make a promise and then we struggle to keep that promise because we can’t get the administrative part of it up and running," she commented. Governor Newsom’s office, while declining an interview, has highlighted the initiative as unprecedented, with the governor stating at a May press conference, "no other state in the nation has done more." He emphasized the importance of investing in mental wellness, calling it a "good investment." However, he did not definitively label the program a success.
Experts acknowledge the program’s groundbreaking nature but express concern over the execution. Tom Insel, former head of the National Institute of Mental Health and an advisor to Governor Newsom, noted that the rocky rollout reflects the ambition of the initiative. Yet, he also expected "clearer evidence of dramatic improvement" given the level of investment. Insel elaborated on the pervasive issue of spending money without always seeing commensurate outcomes, stating, "It’s sobering to realize… that you could actually get the programs, get the money, get everything that you want from the policy side, but the execution just isn’t there."
The CYBHI involved a multifaceted approach. The state allocated $730 million for workforce development, including recruitment campaigns and loan repayment programs. An additional $220 million facilitated partnerships between local governments and school officials, and $381 million was distributed as grants for facilities and services. Around $532 million was invested in digital health applications and consultation services, with $232 million dedicated to state operations and program evaluations. While the state has added 1,855 school counselors since 2021, this falls significantly short of Newsom’s pledge to have 10,000 by the end of the current year.
The "flagship" component, the CYBHI Fee Schedule program, aimed to increase on-campus behavioral health services at no cost to families by allowing schools to bill insurers. Nearly a third of the total investment, approximately $1.3 billion, was allocated to establishing campus wellness centers, developing new billing infrastructure, and enhancing school-based mental health support.
Administrative Nightmares and Uneven Success
The core challenge for schools has been navigating the complexities of medical billing, a domain unfamiliar to most educational institutions. Trina Frazier, assistant superintendent of student services for the Fresno County Office of Education, described their February 2025 medical billing launch as "like building the plane while flying it." The delays were so severe that lawmakers authorized $20 million in grants to Fresno and 170 other school systems to prevent layoffs of newly hired mental health staff while they awaited reimbursements.
In contrast, some districts have achieved more success. Anaheim Elementary School District in Orange County, lauded by state officials as a program "champion," has recouped over $1.1 million since its 23 campuses began billing student insurance in February 2025. However, program specialist Shirley Diaz noted that this amount represents less than 30% of the behavioral health services provided. Beyond billing complexity, parental reluctance to share health insurance information, particularly in predominantly Latino districts where past immigration enforcement actions have fostered fear, has also been a barrier.
To manage claims, the state contracted with Carelon Behavioral Health, operated by Elevance Health, for $65 million. Despite this, schools have continued to struggle with claim approvals, with many spending hundreds of thousands of dollars to hire external vendors for assistance. As of June 1, Carelon had approved approximately 232,100 claims totaling over $11.3 million for 186 school districts and educational agencies. This figure represents a small fraction of the thousands of entities the state hoped would participate and falls far short of the anticipated $500 million annually.
Amy Blackshaw, behavioral health project director for the California School-Based Health Alliance, observed, "We probably were given the impression that this was going to happen more quickly and now there’s this reality of a kind of slow growth." Carelon contract manager Christina Kim declined to comment, referring inquiries to the state. Autumn Boylan, deputy director of the Office of Strategic Partnerships at DHCS, acknowledged the challenges, stating that staff have incorporated feedback, extended deadlines, and eased onboarding requirements. However, she emphasized that significant changes take time, adding, "We’re trying to help the school districts increase their scale. It’s not a problem of claims being submitted and not paid. It’s a problem of claims not yet being submitted for payment." Boylan did note a significant increase in reimbursements since the first claims were filed in November 2024.
Persistent Need and Evolving Concerns
Meanwhile, the need for mental health services among California’s youth remains acute. Data from the California Health Interview Survey indicates that in 2024, nearly 14% of individuals aged 12-17 delayed or skipped mental healthcare due to an inability to get an appointment, and one in four teens cited cost as a reason, an increase from the previous year. While the rate of young adults (18-24) who have seriously considered suicide has stabilized, it remains higher than pre-pandemic levels. Furthermore, although the overall suicide rate among Californians aged 12-25 has decreased from its 2021 peak, mirroring national trends, rates for female and Black youths have unfortunately risen between 2023 and 2024.
Assembly member David Alvarez expressed concern, stating, "We have to have high expectations that when we invest in the magnitude of billions as this program did, we would have results to show." Other states are observing California’s struggles, with some adopting more targeted approaches. Sharon Hoover, formerly co-director of the National Center for School Mental Health at the University of Maryland, noted that some states are implementing fewer strategies at once, citing Illinois’ focus on universal mental health screenings and Colorado’s expansion of coverage for behavioral health services for youths without formal diagnoses.
Hoover acknowledged the difficulty of being a pioneer, stating, "It’s always hard to be first, and someone has to be brave enough and hopeful enough to take that leap." She believes that launching the reimbursement program before the billing infrastructure was fully established created momentum but also presented significant challenges. Nevertheless, she views Governor Newsom’s emphasis on prevention and early intervention as a major national policy shift. Alex Briscoe, a principal at the nonprofit Public Works Alliance, called it "one of the most progressive actions in the history of public systems," but added, "We spent a significant amount of money preparing for it. I just don’t think we did that very well or strategically."
Rural Schools Bear the Brunt
The challenges are particularly pronounced for smaller, rural districts like Plumas Charter School. In the fall of 2021, students at Plumas Charter were grappling with a confluence of traumas, including wildfires, COVID-19 shutdowns, and the tragic death of a classmate. Teachers observed escalating signs of depression, anxiety, and behavioral issues, with nine students reporting suicidal ideation that year. The school responded by hiring a full-time therapist and wellness coach using temporary federal funds.
Senior Will Coelho, who moved to Quincy the following year, found solace in the school’s therapist. Having experienced significant personal loss, including the death of a friend in a murder-suicide and a difficult family situation, Coelho began seeing the school therapist weekly. "It has had a large impact on the way I process emotions and my outlook on life," he shared. However, behind the scenes, school officials worried about sustaining the therapist’s salary as federal funds dwindled.
Plumas Charter’s applications to the state’s reimbursement program were rejected twice, with officials citing insufficient systems for billing private insurers and collecting student insurance information. When school staff encountered difficulties with online claims submission, state officials suggested paper submissions. Washburn feels the program is not suited for small rural districts where staff often wear multiple hats. While a DHCS spokesperson noted that many charter schools are small and may not be expected to participate, lawmakers representing rural areas argue the program should be universally accessible. Addis has proposed legislation to provide intensive technical assistance to schools needing support. Despite these efforts, Washburn remains uncertain if Plumas Charter will generate enough revenue to retain its therapist. "In theory, this should be a good program," she concluded. "We’re too small, and our funds are too limited to just keep waiting."
