The State Needs Sustained Investment in Early Childhood Mental Health Programs Amid Changes in California's Behavioral Health Landscape

Key Points:

• Despite historic investments in children's behavioral health, the birth through age five population remains underserved.

• The sunsetting of Children and Youth Behavioral Health Initiative (CYBHI) Evidence-Based and Community-Defined Evidence Practices grants along with the forthcoming changes to BHSA threaten to widen that gap.

• New Medi-Cal benefits are promising but insufficient on their own, and some early childhood mental health programs like Infant and Early Childhood Mental Health Consultation are not a good fit for individual billing.

• Early childhood must be prioritized through direct investment, ongoing funding, and using First 5s as implementation partners.

In recent years, California has launched several major initiatives that have reshaped the children's behavioral health services landscape. While these investments have elevated the profile of children's mental health broadly, early childhood and prevention have not always received proportionate attention. The state is reaching an inflection point. New Medi-Cal benefits and funding streams hold potential to sustain some early childhood mental health programs that were supported by past initiatives, but more focus is needed to ensure the state delivers on its promise to serve children starting at birth.

Since 2020, California has launched Children and Youth Behavioral Health Initiative (CYBHI), California Advancing and Innovating Medi-Cal (CalAIM), added a new benefits , and expanded eligibility for mental health services even if a child does not have a diagnosis. Despite the overall tide rising for children’s behavioral health investments, early childhood impact may not be as robust. For example, while the intent of CYBHI was to serve birth age 25, most of the initiative has centered school-aged children, and the grants for evidence-based practices that have funded some early childhood programming will sunset. Furthermore, new benefits like dyadic services, which enables caregivers to receive behavioral health support during their child’s pediatric visit, requires additional resources to increase uptake and ensure meaningful access across the state.

What is at stake for early childhood and prevention becomes even more consequential when considering the changes from the Behavioral Health Services Act (BHSA), which replaced the Mental Health Services Act (MHSA) with the passage of Proposition 1 in March 2024. While MHSA had a broader focus on a spectrum of mental health services including prevention, BHSA has a more explicit focus on acute mental illness, housing, and substance use disorder treatment alongside mental health services. BHSA removes the dedicated prevention and early intervention (PEI) funding stream that existed under MHSA, splitting it into county-led early intervention funding and separate state-led prevention funding.

The state maintains that counties are still able to invest in early childhood through BHSA County Integrated Plans. However, changes to priority population definitions under BHSA and an increased emphasis on addressing acute mental illness have led many counties to decrease or eliminate funding for early intervention programs serving young children. At the state level, the recently released California Department of Public Health’s (CDPH) plan for how BHSA prevention dollars will be spent does not make a strong case for the prioritization of early childhood mental health. The plan also excludes First 5s as eligible grantees or implementation partners, despite their role as a statewide network of birth through age five community connectors that bring a whole-family perspective, access to local providers, and the ability to strategically braid funding.

These changes create significant uncertainty for programs like Infant and Early Childhood Mental Health Consultation (IECMHC), an important early childhood mental health approach which builds the capacity of adults working with young children to support healthy social and emotional development. In California, IECMHC is funded through a patchwork of investments including MHSA (historically), First 5 Proposition 10 dollars, an adjustment factor to state childcare contracts that incentivize implementation, and more recently, the CYBHI grants.

In recent years, the state has emphasized that Medi-Cal may be able to fund practices historically supported by MHSA and other statewide initiatives. In December 2025, DHCS released a draft Evidence-Based Practices and Community-Defined Evidence Practices Resource Guide, mapping components of mental health intervention models to Medi-Cal billing codes. In some instances, there are new opportunities for Medi-Cal billing. The Child Parent Psychotherapy (CPP) program can now be supported by the Medi-Cal family therapy benefit (launched in 2020) and HealthySteps can be supported by the dyadic care services benefit (launched in 2023). In other cases, new benefits like the community health worker (CHW) benefit and enhanced care management (ECM) can offset the cost of implementing models that support care navigation like home visiting -- an approach many First 5s are piloting.

However, some critical early childhood mental health programs like IECMHC are a poor fit for Medi-Cal’s individual billing model. As an indirect intervention, the question of whose Medi-Cal to bill becomes important. Billing with certain codes on behalf of a child may be appropriate in some situations, but more exploration is needed. Furthermore, even if organizations implementing IECMHC wanted to bill, there is a large administrative lift to Medi-Cal contracting and billing that may not be worth the effort for limited reimbursement.

First 5 Association is championing a budget ask this year to address some of these concerns, requesting an additional $20 million to the Population-Based Prevention Fund specifically for children ages birth through 5, the inclusion of First 5s as eligible applicants for CDPH BHSA Prevention Funds, and an ongoing, dedicated funding stream for young children. In addition, we continue to advocate for ongoing technical assistance and capacity building supports to help community providers make new Medi-Cal benefits like dyadic care, CHW, and ECM a reality for families.

Babies’ earliest relationships and experiences shape the architecture of their brain, creating a foundation on which future development and learning unfolds. Without careful attention to young children and the programs that support them, the state risks losing out on the full potential of its multi-billion, multi-year investments in health care transformation and child behavioral health. Prioritizing early intervention and prevention ensures children and families receive the support they need as soon as possible.