ANCHOR Act of 2025

The ANCHOR Act of 2025, HR6408, amends Section 1902 of the Social Security Act to allow states to provide Medicaid assistance to uninsured individuals with serious mental illness or substance use disorder, provided their income does not exceed 100 percent of the poverty line. This bill creates a new category of "specified individuals" eligible for Medicaid, directly expanding the pool of insured patients for behavioral health services. This is a significant development as it broadens the scope of Medicaid, a primary funding source for mental health and substance use disorder treatment. The money trail for this legislation flows through state Medicaid programs. States opting into this program will receive federal matching funds for the newly eligible population. This increases the revenue streams for Medicaid managed care organizations (MCOs) and direct service providers. Companies operating certified community behavioral health clinics (CCBHCs), emergency departments, and other state-certified entities providing mental health or substance use disorder services will see increased patient volumes and reimbursement. Diagnostic companies will also benefit from the increased demand for qualifying condition assessments. Historically, expansions of Medicaid eligibility have led to increased revenue for healthcare providers and insurers. For example, the Affordable Care Act (ACA) Medicaid expansion in 2014, which allowed states to extend coverage to adults up to 138% of the federal poverty level, resulted in significant growth for Medicaid MCOs. Companies like Centene ($CNC) and Molina Healthcare ($MOH) experienced substantial revenue increases and stock appreciation in the years following the ACA's implementation. While the ANCHOR Act is more targeted, it follows a similar mechanism of expanding the insured population for specific conditions. Specific winners include large Medicaid managed care organizations such as UnitedHealth Group ($UNH) through its Optum and Medicaid segments, Elevance Health, Humana ($HUM), Molina Healthcare ($MOH), and Centene ($CNC). These companies manage state Medicaid programs and will see an increase in their covered lives. Diagnostic companies like LabCorp ($LH) and Quest Diagnostics ($DGX) will benefit from increased testing required for qualifying condition determinations. Healthcare staffing companies such as AMN Healthcare Services ($AMN) will experience higher demand for behavioral health professionals. There are no clear losers from this bill, as it expands coverage without imposing new costs or restrictions on existing entities. This bill has been referred to the House Committee on Energy and Commerce. As Rep. Pfluger is a junior member, the immediate legislative momentum is moderate. The next step is committee consideration, which could involve hearings and markups. If it passes committee, it would then proceed to a floor vote in the House. The timeline for passage is uncertain, but committee referral indicates the start of the legislative process. If enacted, states would then need to opt into the program, leading to a phased implementation across different states.