Executive Summary:

• The Biden administration has encouraged states to use Medicaid funds to alleviate the homelessness crisis with around 20 states directing billions of dollars from their Medicaid program to provide short-term housing for those experiencing homelessness, with some states devoting anywhere from six to fifteen percent of its Medicaid spending to such programs. 
• In 2023 homelessness increased by 12 percent and the Biden Administration believes allocating funds from Medicaid to short-term housing initiatives will improve health outcomes and mitigate the housing crisis, but healthcare leaders and homelessness experts are at odds over the effectiveness of the program. 
• Despite a lack of evidence that this redirection of funds is beneficial, states continue to allocate Medicaid monies to provide short-term housing to beneficiaries, which may create new barriers to care for both the homeless and traditional Medicaid populations. Since quality and timely care are difficult to find for many Medicaid beneficiaries, these programs should focus their attention on improving the quality and accessibility of the care they already provide, instead of expanding into social services.  

Introduction:

On November 16th, 2023, The Biden Administration released a press statement in collaboration with the U.S. Department of Housing and Urban Development announcing the Medicaid and Children’s Health Insurance Program (CHIP) Health-Related Social Needs (HRSN) Framework, a framework that sets up states to use appropriate interventions to support housing efforts for certain Medicaid enrollees. Following this press release, around 20 different states have started implementing these interventions, and those who believe in the benefits of these services are investing anywhere from 100 million to 12 billion dollars in the initiative. Despite the press release, and the encouragement of the Biden Administration, health and homelessness experts worry that the new initiative fails to address the root causes of health issues and will create further problems down the road when beneficiaries’ housing assistance runs out.  

The Homelessness Crisis:

Homelessness in the United States has steadily risen since 2017, further increasing the buzz around the homelessness crisis. In 2022, 421,392 individuals and 127,768 chronically homeless individuals were classified as being without a regular, fixed, or permanent living arrangement. There are Three specific populations receiving the most support from homeless services including chronically homeless individuals, veterans, and unaccompanied youth under the age of 25. Despite the increase in homeless shelters and other nightly services, which serve approximately 348,630 people a night, around 40 percent of individuals experiencing homelessness still live unsheltered. This means that their primary nightly residence is a location not suitable for human habitation, such as a sidewalk, vehicle, or an abandoned building. Since living unsheltered can impact not only a person’s safety but also their health, new initiatives have been created to address the aspect of health during the homelessness crisis.  

Favor and Funding:

Using Medicaid funding to provide rent or room and board was previously banned by the Federal government, however, at that time states did have the legislative authority to provide housing related services if they promoted individual and community health. These services included developing an individualized housing support plan, assisting beneficiaries in filling out housing forms and holding educational classes to teach about the rights and roles of tenants and landlords. However, everything changed in October of 2022 when Arizona was amongst the first states to receive federal approval to implement a program called “H20”, which will provide rental assistance and transitional housing to Medicaid beneficiaries with chronic or mental health conditions. Arizona’s state Medicaid program is investing $550 million into the H20 program, which is about 6.25 percent of Arizona’s Medicaid budget for medical services. This approval paved the way for more states to start investing Medicaid funds into housing services. California is investing the most into such initiatives, with its Medicaid program paying close to 12 billion dollars to provide housing to homeless Medicaid beneficiaries, which is around 8 percent of the state’s total Medicaid spending. Oregon is investing almost 1 billion dollars to provide emergency rental assistance, which equates to around 15 percent of Oregon’s Medicaid budget. Despite this new approval by the federal government, there has been a lot of back and forth between the potential benefits and the possible consequences of such a program. 

Current Initiatives:

In 2022, California, home to almost 30 percent of the nation’s homeless population, launched CalAIM, an initiative to offer a variety of social services to a small fraction of the state’s Medicaid population. Many of these resources are going towards housing services for those experiencing homelessness or those facing eviction, hiring case managers to help enrollees find apartments, and covering security deposits and the first month of rent. California leaders are actively asking the Biden Administration for permission to help cover the first six months of rent, for enrollees in the CalAIM program. Oregon plans to launch a program requiring Medicaid insurers to provide housing in November 2024 to combat the 12 percent growth in homelessness the state saw between 2022 and 2023. Its program will allow participants to be eligible for up to six months of rent and other social services as needed. Not only are states experimenting with the approach of housing as healthcare, but some organizations are starting to do the same. Kaiser Permanente has invested almost $200 million into the building and maintenance of affordable housing units for its Medicaid enrollees. 

The Dilemma:

While many professionals boast about the hopeful success of this initiative, homelessness and healthcare experts are wary of such programs. Sherry Glied, an expert in health economics and a former Obama administration official, warns that healthcare institutions providing social services could be a “dangerous distraction” to people’s health and healthcare. Glied emphasizes this point, by citing how many of these institutions that are starting to provide housing as a service, are already struggling to meet patient safety and quality standards. She argues that these institutions should leave the issue of housing to social service organizations who dedicate themselves to this type of work and instead focus themselves on improving the basic care and patient outcomes at their facilities.  

Further, Medicaid faces constant criticism for failing to provide basic and necessary healthcare to many of its enrollees. The safety net program often struggles to provide basic preventative care for its enrollees, including pediatric dental visits and breast and cervical cancer screenings. In California, the state spending the most Medicaid funds on housing, children on Medicaid were unable to get access to timely care for mental and behavioral health problems. Margot Kushel, a homelessness expert and primary care doctor at Zuckerberg San Francisco General Hospital and Trauma Center, worries that enrollees who already must wait months for a specialty visit, even for a serious condition, will have to wait increasingly longer for such visits, and maybe even primary care services, due to the introduction of such housing programs. Kushel also points to the danger of the housing program since it is only a short-term fix. She worries that by the time some Medicaid beneficiaries receive this free or reduced housing, they will already be sick, and then on top of that, enrollees will have to worry again about housing when their rental assistance runs out in six months.  

Conclusion:

As homelessness rates in the US continue to rise, the government should continue funding social services and interventions to aid in the homelessness crisis, but using money from a safety net program already struggling to meet the basic healthcare needs of many of its enrollees might not be the best solution. Despite the encouragement from the Biden Administration, the shift in Medicaid’s attention from healthcare to housing may prove detrimental to those who depend on the program. In a time where quality and timely care is difficult to find, healthcare institutions and programs need to focus their attention on improving the quality and accessibility of the care they already provide. Until Medicaid can check those boxes, providing housing and paying for rent, seems to be far removed from the initial goal of healthcare.