U.S. Department of Health and Human Services announces major restructuring

Key Takeaways

On March 27, the U.S. Department of Health and Human Services (HHS) announced a sweeping reorganization that will consolidate agencies, shift key programs under a new framework and eliminate thousands of positions. This change brings HHS in line with President Trump's Executive Order, “Implementing the President’s ‘Department of Government Efficiency’ Workforce Optimization Initiative.”

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Key changes in the HHS restructuring

The restructuring significantly alters HHS’s organizational structure, affecting major agencies and functions. Notably, the restructure plan will consolidate 28 divisions into 15, trim the 10 existing regional offices to 5 and reduce the current full-time employee workforce from 82,000 to 62,000. More specifically, the changes will:

• Create the Administration for a Healthy America (AHA): AHA will consolidate offices focused on chronic disease prevention, behavioral health and community health services, including the Office of the Assistant Secretary for Health (OASH), Health Resources and Services Administration (HRSA), Substance Abuse and Mental Health Services Administration (SAMHSA), Agency for Toxic Substances and Disease Registry (ATSDR) and National Institute for Occupational Safety and Health (NIOSH). This consolidation will streamline public health efforts and centralize programs for low-income and at-risk populations.
• Reorganize the Centers for Disease Control and Prevention (CDC) and Administration for Strategic Preparedness and Response (ASPR): The CDC will return its focus to epidemic preparedness and response, moving away from broader public health research initiatives. It will also absorb ASPR, which oversaw pandemic preparedness and the Strategic National Stockpile. While the CDC faces a decrease of 2,4000 employees, the incorporation of ASPR will bring 1,000 employees into the Center, making the cut 1,400.
• Restructuring of the Centers for Medicare & Medicaid Services (CMS): CMS will absorb some functions from the Administration for Community Living (ACL) with respect to programs for older adults and people with disabilities. While CMS faces a 300-employee cut, this reduction will not impact Medicaid and Medicare Services.
• Disperse Administration for Community Living (ACL) programs: Programs under ACL that support older adults and individuals with disabilities, such as programs authorized by the Older American Act (OAA), will be spilt across the Administration for Children and Families (ACF), Assistant Secretary for Planning and Evaluation (ASPE) and CMS.

Impacts on counties

HHS Secretary Robert F. Kennedy, Jr. stated that the restructuring aims to improve efficiency, reduce bureaucracy and realign the department’s focus on core health priorities. However, the changes—including major program consolidations and the closure of regional offices—have raised concerns about potential disruptions to HHS-funded programs and regulatory oversight.

As essential partners in providing a wide range of critical human services and health programs to residents, counties must be aware of how the HHS restructuring could influence our ability to fund and provide these essential services in several key ways:

• Potential Delays in Federal Support: The closure of regional offices and staffing reductions could slow grant administration, technical assistance and federal-state-local coordination.
• Changes in Public Health and Aging Services Funding Streams: With the creation of AHA and the restructuring of CDC and ACL, counties may experience shifts in funding availability and eligibility for new and existing public health and aging initiatives.
• Impact on Behavioral Health Services: Merging SAMHSA into AHA could alter funding mechanisms and administrative processes for county-run mental health and substance use disorder services.

As these changes take effect counties, as critical intergovernmental partners, must remain actively engaged with federal policymakers uphold their role in shaping policies and ensuring continued access to critical resources for health and human service programs. NACo will continue to advocate for county priorities at the federal level and monitor developments to support counties throughout the transition.