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How is 988 funded?

Although 988 has been designated as a national crisis hotline, states will be primarily responsible for implementing the number and funding their own call centers and mobile response teams. Federal funds will be used to route calls, provide technical assistance, and promote public messaging. The passage of the American Rescue Plan Act and the 2022 fiscal year budget have resulted in a large increase in funds available to states during the initial transition to 988.[1] It is highly recommended that states consider a diverse array of funding. Proposed models include the following: 

  • Mental Health Block Grants

  • 988 State and Territory Cooperative Agreement

  • User fees on phone bills

  • State and local budgets

  • Private grants and donations

  • Medicaid reimbursement

In February of 2021, Texas was awarded a planning grant from Vibrant Emotional Health. This grant was used to form a coalition to write a 988 implementation and sustainability plan. Texas is also eligible for up to 8.36 million through the SAMHSA Cooperative Agreement grant. This one-time, non-competitive grant aims to support states’ development of crisis infrastructure in the early days of 988 and ends in 2024. The grant requires that 85% of funds must go directly to Lifeline crisis centers to support the workforce. 

Consistent funding year after year is crucial to the long-term success of 988. Currently, Texas is relying heavily on federal funding to implement and build out the crisis response system. This funding is only a temporary solution. The National Suicide Hotline Designation Act of 2020 encouraged states to enact a telecommunications fee as a way of financing state crisis programs. This is how most states already subsidize 911. In Texas, for example, residents are charged $0.50 on their phone bill for 911 emergency services.[2] Outside of telecommunication fees, several states, including Utah, have found sufficient funds from other sources to support the implementation and growth of 988. 

Medicaid reimbursement also behaves as a possible source of funding for 988. SMI-SED Section 115 Medicaid demonstration waivers allow states to circumvent the Title 19 exclusion of funding for “institutions for mental disease” in the Social Security Act that established Medicaid and receive funding to establish a crisis continuum of care. Applying for an SMI-SED Section 115 waiver further requires states to complete a thorough assessment of treatment providers in their state, allowing them to diagnose the current state of their mental health and crisis infrastructure and figure out where they need to go next. Even without a section 115 waiver, Medicaid can fund crisis stabilization centers and provide administrative matches for federal costs of setting up and operating crisis call centers. A 90% enhanced match can also be given for designing and developing crisis call and stabilization centers and a 75% enhanced match for maintaining them.[3]


Previous studies support the cost-effectiveness of a mental health crisis line. The average 911 call costs thousands of dollars. In comparison, 98% of calls to 988 can be resolved without needing to dispatch a mobile response, resulting in major savings.[4] Under the current system, individuals in crisis are often taken to emergency departments or jailed. A national survey of police departments and sheriff’s offices found that “an average of 10% of law enforcement agencies’ total budgets was spent responding to and transporting persons with mental illness in 2017.”[5] Not only are these options extremely costly for states, but they also have many negative consequences for the individual in crisis. With proper crisis management, many individuals will benefit from less expensive outpatient care or short-term stabilization centers. 


Additional funding for crisis response is needed immediately. Centers in Texas are understaffed and lack resources to increase their call capacity to meet the oncoming surge in demand. Lifeline centers in Texas also currently lack text or chat capabilities. Additionally, the federal 988 legislature also stipulates the maintenance of mobile response teams and the establishment of a continuum of crisis care. In the 2023 legislative session, Texas must provide for the continued funding of its existing crisis centers and the expansion of crisis infrastructure to successfully implement 988. To learn more about how Mental Health America of Greater Dallas hopes to see 988 implemented in Texas and how other states have rolled out 988, visit the “What other states are doing” tab under the advocacy section. For more information on 988 funding strategies, see “Resources: Financing.”


[1] HHS Announces Critical Investments to Implement Upcoming 988 Dialing Code for National Suicide Prevention Lifeline 

[2] 9-1-1 Surcharge - User Fees by State 

[3] How CMS Medicaid Initiatives Can Help States Fund 988 

[4] Texas Annual State Report 2020 

[5] Road Runners: The Role and Impact of Law Enforcement in Transporting Individuals with Severe Mental Illness 

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