The ANCHOR Act of 2025 creates a new option for states to expand Medicaid coverage to help people struggling with serious mental health and substance use problems. Specifically, it allows states to cover uninsured individuals who earn up to the poverty line and have been diagnosed with serious mental illness, serious emotional disturbance, opioid use disorder, or stimulant use disorder (like cocaine or methamphetamine addiction).

To qualify, a person needs to be identified as having one of these conditions by a doctor, hospital emergency room, mental health clinic, substance abuse treatment provider, or even a court, police department, or child welfare agency. Once enrolled, these individuals get the same Medicaid benefits as other covered groups. The coverage lasts for one year initially, and states can choose to renew it year by year if the person still qualifies.

States that participate must ensure each person gets a care plan within 60 days of enrollment—essentially a roadmap for their treatment created by a healthcare provider. States also have to track and report how well they're doing at treating these patients using standard quality measures. This bill essentially gives states a tool to catch people with serious mental health and addiction issues before they end up in crisis situations, offering them medical coverage and coordinated care when they need it most.