The ANCHOR Act of 2025 creates a new option for states to provide Medicaid coverage to people struggling with serious mental health conditions or substance use disorders. Specifically, it targets uninsured individuals whose income is at or below the poverty line and who have been diagnosed with serious mental illness, serious emotional disturbance, opioid use disorder, or stimulant use disorder (like cocaine or methamphetamine addiction). These diagnoses can be made by doctors, mental health clinics, emergency departments, or even law enforcement and child welfare agencies.

If a state chooses to participate in this program, eligible individuals would receive Medicaid coverage for one year, with the option to renew for additional years if they still qualify. The key requirement is that within 60 days of enrollment, each person must have a care plan created by a qualified healthcare provider—whether that's a doctor, therapist, community health center, or similar provider. States that participate must also track and report on the quality of behavioral health services they're providing.

In practical terms, this gives states a new tool to help some of their most vulnerable residents access treatment and care they might otherwise go without. It's designed to bridge a gap for people who don't qualify for regular Medicaid but desperately need help with mental health or addiction issues. However, it's optional—states can choose whether or not to offer this coverage.