That is a huge myth that continually gets repeated.
The APA wanted to go for the least restrictive environment for the mentally ill and pushed to close mental institutions. President Kennedy signed an act in 1965 pushing for deinstitutionalism in medical care and CONGRESS subsequently cut funding to institutions by 50% to FORCE the states to follow suit. Reagan could either wreck the budget by making the state pay the other 50% or cave to the Fed Gov and pressure from the state assembly.
Even the uber-liberals at NPR who despised Reagan debunked this lie.
Stop repeating it.
Quite a feat on his part as he was assassinated in 1963.
Good info, thanks.