States are spending billions of dollars on high-stakes medical experiments that use scarce public health insurance money to house the poorest and sickest Americans.
The number of homeless people in the United States increased by 12% last year to an estimated 653,104 people, an all-time high. At least 19 states are redirecting funding from Medicaid, the federal health insurance program for low-income people, to address the crisis, according to the Centers for Medicare and Medicaid Services.
California is the largest, spending $12 billion on Medicaid initiatives to help people, mostly homeless, find housing, pay for it and avoid eviction. Arizona has allocated $550 million in Medicaid funds to cover six months’ worth of rent, primarily for homeless people. Oregon spends more than $1 billion on services such as emergency rental assistance for patients facing homelessness.
Even the ruby-colored state of Arkansas plans to spend nearly $100 million housing some of its poorest people. Tennessee, West Virginia and Montana are in the planning stages.
The Biden administration is encouraging other states to join. This is part of a broader White House strategy to encourage Medicaid leaders to provide social services alongside traditional medical care, with the goal of improving population health.
“Health care costs are more than just paying for doctor visits and hospitalizations,” U.S. Department of Health and Human Services Secretary Xavier Becerra told KFF Health News. “Who would deny that people who become homeless have a harder time maintaining their health?”
States aren’t the only ones experimenting with this approach. Shelley Greed, a New York University professor and former Obama administration official, noted that at least 57 health systems and 917 hospitals nationwide have launched social services initiatives, most of which focus on housing. .
Becerra acknowledged that these efforts are experimental. But he said the federal government can no longer ignore the rampant death and disease plaguing homeless people.
“We’re just saying, ‘Country, if you can prove to us that you can improve someone’s health and well-being with this Medicaid money, you’ve essentially fulfilled the purpose of the Medicaid program. ‘ and we’re saving taxpayers more money,’ he said.
However, the evidence supporting this argument is mixed. There is little agreement on whether this strategy is a long-term solution to the health and housing of vulnerable patients.
For example, a trial by researchers at the University of California, San Francisco, found that homeless people in Santa Clara County, California, who were randomly assigned to receive long-term housing and services, used psychiatric emergency departments at a lower rate than the control group. It was 38% less than the previous year. for 4 years while increasing access to regular mental health care. However, hospitalization rates among participants remained high and they continued to rely on emergency rooms.
Still, states continue to make progress.
Arizona: Save $4,300 per person
Arizona saw a 5% increase in homelessness in 2023. “Housing agencies are stretched to their limits and there is a huge need to help people stabilize,” said Alex Demian, deputy director of the state Medicaid agency.
A state-funded Medicaid initiative is providing 3,000 rent vouchers to people in southern Arizona with severe mental illness who are homeless or at risk of becoming homeless. According to state data, the program reduced emergency department visits by 45% and hospitalizations by 53% six months after patients started receiving services, while increasing lower-cost preventive care by 56%. This resulted in savings of $4,300 per month per member.
“As a result, we saw positive health outcomes and reduced costs, so it made a lot of sense to expand our efforts in this area,” Demian said. Masu.
The state is now adding a Medicaid program that prioritizes homeless people and people with mental health conditions or chronic illnesses who are at risk of losing their housing. It will provide up to six months of rent payments and transitional housing, including a shelter with intensive services.
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west coast solution
California is home to nearly 30% of the nation’s homeless population. The state launched its massive CalAIM initiative in 2022, providing a wide range of social services to a small portion of the state’s roughly 15 million Medicaid enrollees. Most of the resources are used for housing.
“If you have a major physical or behavioral health condition, such as diabetes, HIV, high blood pressure or schizophrenia, it is very difficult to stabilize those conditions without housing.”California Commissioner Mark Gurley said. Health and Human Services Agency.
But he cautioned that the core of Medicaid must remain focused on keeping people healthy, even if they are living outdoors. This is a tremendously costly challenge because conditions such as diabetes, heart disease, and HIV require ongoing treatment and often require multiple medications.
“I don’t think health care is responsible for solving homelessness,” Gurley said. “But if housing instability or lack of housing is one of the major factors hindering health, then we absolutely need to pay attention to it.”
In California, health insurance companies offering Medicaid insurance can choose whether to provide housing services, while Oregon requires Medicaid insurance companies to do so. The state is targeting patients at risk of homelessness. When the program launches in November, participants will receive six months of rent and other services, said Dave Burden, deputy director of the Oregon Health Authority.
mission creep
Not all medical leaders, or even homelessness experts, believe that housing is the best use of Medicaid funds. This is especially true for safety net programs, which routinely face criticism for failing to provide health care to many of their members.
State Medicaid programs often struggle to provide basic medical services such as pediatric dentist visits and breast cancer screenings. In California, the state with the highest spending on housing, children receiving Medicaid did not receive timely mental health and substance use care in 2022, a November audit found.
“When you’re on Medicaid, you often have to wait months to see a specialist, even if it’s life-threatening. I’m worried,” Margot said. Kuchel is a leading homeless researcher and physician in San Francisco who primarily treats patients from low-income families.
Kuchel said the danger is that most Medicaid housing assistance is available only once or has a time limit.
“By the time people move into housing, they’re already really, really sick,” she says. “What will happen to her after 6 months when her rent assistance such as free rent ends?”
That’s why Oregon’s program is “really trying to focus on people who are teetering on the brink,” said Baden, the deputy director. “If someone is already homeless, we really need longer-term sustainable housing funding to keep them housed.”
In a recent health policy analysis, Professor Glide of New York University warned about the growing mandate in health care. She warned that social services could become a “dangerous distraction” and argued instead that medical programs should improve basic care and housing should be left to organizations that specialize in it.
“Providing people with food and shelter is very far removed from the core mission of medicine,” she told KFF Health News.
Peter Lee, a fellow former Obama administration official and founding executive director of the California Obamacare Exchange, said health care providers should consider providing housing and social services, but he also believes such efforts divert funding away from traditional medicine. He said he is concerned that patients may not be able to receive treatment.
“Over the past five to 10 years, there has been a growing recognition that health is much more than actual medical care. That’s exactly the case,” Lee said. “The question is how do we address these issues when health care itself is not doing very well?”
Still, states insist they are proactive, even if the efforts don’t pass traditional cost-benefit analysis.
“The singular focus of economic return on investment is not as clear as it used to be,” said Cindy Mann, who headed federal Medicaid in the Obama administration. “States are realizing how pointless it is to treat people and then put them back on the streets.”
This article was created by KFF Health Newspublish california healthlinean editorially independent service. california healthcare foundation. KFF Health News is a national newsroom that produces in-depth journalism on health issues and is one of KFF’s core operating programs and an independent source of health policy research, polling, and journalism. is.
