California’s Mental Health Services Act (MHSA) funded county behavioral health services for 20 years. A ballot initiative approved by voters in 2024 replaced the MHSA with the Behavioral Health Services Act (BHSA), and counties began operating under their first BHSA Integrated Plan in July 2026.

BHSA requirements trade local flexibility for structure and accountability, and this trade-off comes at a time when many counties need flexibility the most. Below are six key changes resulting from BHSA that are shaping the California county behavioral health system today.

1. Greater Scrutiny of How County Behavioral Health Funding is Spent

Counties now find themselves operating in a far more transparent environment. For the first time, BHSA requires counties to report on all behavioral health spending. Counties report on planned spending across Medi-Cal, Medicare, federal grants, local funds, and other sources in their three-year Integrated Plan.

2. A Shift Toward Population Health

BHSA establishes new population health measures that aim to help counties gain a better understanding of who needs what services and when within their system. As data infrastructure matures at the state and county levels, counties will gain access to more granular, person-level information that can support more targeted interventions.

3. Greater Parity for Substance Use Disorder Services

Under MHSA, counties could only fund SUD care when clients were experiencing a co-occurring mental health disorder. BHSA allows counties to fund stand-alone SUD services and makes SUD services a cornerstone of county BHSA programs. BHSA ensures Housing First protections for people with a SUD; Full Service Partnerships must include SUD treatment; and early intervention programs must include SUD services and supports. However, there is no new funding for SUD services in BHSA, so counties must make trade-offs to fund SUD services within their already-stretched BHSA budgets.

4. Less Room for County-Funded Prevention

Under MHSA, counties could fund broad, population-level prevention such as awareness campaigns, schoolwide programs, and universal screenings. Counties can still pay for "indicated prevention," which includes activities like outreach, assessment, and referrals for individuals already showing early warning signs. However, many of the traditional prevention programs that counties built over two decades can no longer be funded through county BHSA programs.

5. Solidification of County Behavioral Health’s Role as a Safety Net for Housing and Housing Supports

Housing was already a growing MHSA priority (about $286 million, or roughly 10% of spending, in FY 2022–23), but BHSA makes it explicit. Counties must now dedicate 30% of their funding to housing, pushing statewide BHSA housing spending toward an estimated $950 million by FY 2026–27. BHSA also requires counties to coordinate with Medi-Cal Managed Care Plans to strengthen this safety net to support people moving on and off Medi-Cal housing supports like Transitional Rent.

6. Less Flexibility to Absorb Shocks and Major Shifts in the System

MHSA functioned as a flexible fund of last resort that counties leaned on to plug holes across services and funding streams. BHSA keeps the "payer of last resort" concept but tightens it considerably by adding more requirements for counties and providers to ensure that other funds have been exhausted before using BHSA dollars. The timing is tough because counties are losing the flexibility that helped them absorb funding disruptions right when they’re heading into a period of real disruption. Counties are facing Medi-Cal coverage losses tied to federal policy changes (including H.R. 1) and significant state and local budget pressures.

Looking for More Information or Support on BHSA?

If you’re interested in learning more about the fiscal and policy shifts from MHSA to BHSA, check out Aurrera Health's series of primers published in partnership with the California Health Care Foundation that break down the transition from MHSA to BHSA, including key funding changes, updated priorities, and what the new framework means for counties and behavioral health partners. We also dove into how BHSA funding requirements are reshaping behavioral health financing on our blog.

To learn more about the services Aurrera Health provides to help counties and organizations navigate BHSA, contact Allison Homewood.

Devin McBrayer [Director]

Allison Homewood [Managing Principal]

Beyond the Transition: Six Changes That Will Shape California’s Behavioral Health System Under BHSA