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A PRESCRIPTION FOR HOUSING?  
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Rachel M. Cohen
February 13, 2024
Vox
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_ States prepare to use Medicaid for rental assistance for the first
time. With rents growing to their most unaffordable levels ever, some
states are preparing to use federal Medicaid dollars in the hopes that
health will improve as housing stabilizes. _

A sign indicating the availability of a home to rent stands outside a
building in Philadelphia on June 22, 2022. (Phot: Matt Rourke/AP //
Vox),

 

For more than a decade, researchers and advocates have argued that
housing is a fundamental part of health care. Beginning this fall,
for the first time, federal Medicaid dollars will start going toward
paying some people’s rent.

It’s a significant policy development. Congressional regulations
have long barred Medicaid funds from being used to pay for rent for
people staying outside of nursing homes or medical facilities like
hospitals. And while some states have used philanthropy
or state-based Medicaid funding to pay for housing, those pots of
money were extremely limited. Now, with rates of unsheltered
homelessness reaching record highs in 2023
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and rents growing to their most unaffordable levels ever
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some states are preparing to use federal Medicaid dollars in the hopes
that health will improve as housing stabilizes.

The Biden administration has made this possible through a
longstanding Medicaid waiver program
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allows states to test out new Medicaid ideas.

For nearly a decade, the federal agency that runs Medicare and
Medicaid has been warming to the idea that housing could be health
care. Since 2015, the Centers for Medicare and Medicaid Services has
affirmed
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Medicaid funds could go toward services that help people move into new
housing, like moving costs or security deposits. In 2018, an
influential federal commission told Congress that
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while it’s long been known that poor housing conditions can worsen
health outcomes, more recent data suggests that providing supportive
housing to chronically homeless people also reduces ER visits in ways
that case management or other outpatient services does not.

The “housing is health care
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mantra got another major boost during the pandemic, when calls to stay
at home to avoid catching and spreading disease grew louder and more
urgent. Communities that halted evictions
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lower rates of Covid-19 [[link removed]], a
stark example of how access to housing is linked to health.

And in 2022, the Biden administration encouraged
[[link removed]] states
to consider using Medicaid dollars for “health-related social
needs” like housing, nutrition, and transportation — part of a
broader White House effort
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address social determinants of health.

“We think it’s incredibly exciting,” Dan Tsai, the deputy
administrator and director of the Center for Medicaid and CHIP
Services, told me. “This is a firm, clear stance, and we spent about
a year of this administration working through how to define and create
with guardrails the role of Medicaid in housing and nutrition.”

Tsai said their conclusion was based on both common sense and
evidence-based practices, that for some groups of people, throwing
“the same old against the wall” just would not drive better
health.

Jeff Olivet, the executive director of the US Interagency Council on
Homelessness, similarly told me he sees the ability to use Medicaid
dollars for purposes like rent as “a real potentially game-changing
set of supports” to help people exit homelessness and then stay
stably housed.

Not everyone thinks this possibility is a good move for Medicaid, an
already strained federal program with notoriously low reimbursement
rates
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doctors that disincentive treating patients. Just 3 percent
[[link removed].] of
a state’s Medicaid spending can go toward “health-related social
needs” like housing, but that could still easily amount to billions
of dollars annually. Others doubt the claims that paying for housing
will drive down overall government spending.

Sherry Glied, a dean and professor of public service at New York
University, warned recently of “mission creep” in health systems
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arguing that having hospitals and other medical institutions focus on
the provision of social services could be a “dangerous
distraction” from their core mission of serving patients, and one
that policymakers should discourage.

The failure of Congress to dedicate more money to agencies like the
Department of Housing and Urban Development is how we got to this
point, said senior policy director for National Health Care for the
Homeless Council Barbara DiPietro.

“More and more states are desperate to find any help, and that’s
why they’re turning to Medicaid because they’re not getting real
assistance from HUD,” she told Vox. “And Medicaid is an
entitlement program while housing is not.”

The new pilot program authorizes Medicaid dollars for up to six months
of rent and could herald much bigger shifts down the line if state
results show improvements in health outcomes or cost-savings. It could
also augur much larger shifts across state and federal governments to
bring about more comprehensive visions of health care.

Arizona and Oregon will go first

The federal government has approved a handful of states to use waivers
to finance rental assistance for up to six months. The first states to
put this into practice are Arizona starting this October, and Oregon
this November. The two are planning to target different subpopulations
of Medicaid beneficiaries, and both are scrambling to figure out how
to make this all possible given shortages of affordable housing.

Oregon’s Medicaid program currently provides coverage to
roughly 1.5 million Oregonians
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and the state estimates 125,000 of those people will soon be eligible
to qualify for rental assistance under this new waiver. Oregon is
opting to target beneficiaries at risk of becoming homeless, in effect
using the funds as a preventive tool to help stave off the
devastating economic
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and mental harms [[link removed]] that come
with losing one’s home. Individuals will literally get a
“prescription” for housing.

To refer eligible people, the state will look to partner with
community-based organizations. Housing nonprofits that get involved in
this work will need to train their caseworkers as certified community
health workers.

“It’s a little scary for them, because they don’t want to become
medical providers in the same way a doctor doesn’t want to become a
housing provider,” Dave Baden, the deputy director of Oregon’s
Health Authority, told me. “We can’t medicalize the housing
world.”

Over time, Baden hopes the state will be able to use this kind of
funding to pay rent for people living on the streets, but he thinks
Oregon needs to increase its housing supply first.

“This Medicaid waiver is not magically going to make housing exist,
and I feel like we would have gummed our work to focus on those who
were houseless to start with,” he said. “I don’t want to create
a false benefit where we say, ‘Hey, Amy, here’s six months of
rent, oh, I’m sorry I don’t have any housing for you.’”

Arizona, by contrast, is planning to target people designated as
having a serious mental illness
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building off a similar but much smaller state program
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rent for about 3,000 Medicaid beneficiaries each year.

That program, which is not time-limited, has been considered an
extraordinary success: State data
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financing rent led to a 31 percent reduction in ER visits, a 44
percent reduction in inpatient hospital stays, and savings overall to
Arizona’s Medicaid program of more than $5,500 per member per month.

“That’s one of the big reasons we felt so strongly about pursuing
[the 1115 waiver] and being able to federalize some of that work,”
said Alex Demyan, an assistant director with Arizona’s Health Care
Cost Containment System. “We’re in a unique and advantageous
position because we have a runway.”

With a significant affordable housing shortage
[[link removed]], Arizona is looking
to authorize a new kind of housing provider to help with supply
issues, known as an “enhanced shelter.
[[link removed]]”
These will be new organizations that contract with Medicaid to provide
mostly congregate housing, and get reimbursed on a per-diem basis.

Demyan sees the opportunity to use Medicaid for rent as potentially
transformative. “It’s a huge deal; this kind of cutting-edge work
is really what makes working in Medicaid so rewarding in a lot of
ways,” Demyan told me. “We get to play around in the sandbox of
health policy and do things differently. I don’t think it’s any
secret that there are better ways that we can do things.”

The fine print

As Oregon and Arizona — as well as other states that have applied to
use federal Medicaid dollars for rent like New York, California,
Hawaii, and Washington — prepare for the opportunity, they are
hoping to build collaboration between government agencies, private
companies, and community nonprofits that historically have rarely
worked together.

“There has to be some system-level linkage between the housing and
homelessness systems and the medical services; otherwise, we are very
concerned about what will happen to people at the end of their six
months,” said Marcella Maguire, the director of Health Systems
Integration for the Corporation for Supportive Housing. “This
funding will put more people into an already underresourced system.
Long-term, I think it will reduce strain, but short-term it will
increase strain.”

DiPietro, of the National Health Care for the Homeless Council, said
she has some worries about how states might use this new Medicaid
opportunity to jump people ahead of those waiting in the established
line for subsidized housing, or even how receiving Medicaid funding
could threaten their eligibility for other homeless services programs.

Olivet, of the US Interagency Council on Homelessness, said the
eligibility issue is “certainly on our radar screen” and that his
agency wants to serve as “connective tissue” to ensure federal
policies are implemented in a strategic way. But state Medicaid
departments have a “tremendous role” to play in shaping the
specifics of each waiver, Olivet added, and coordination between
health and housing providers “is where the real work will happen.”

Richard Cho, a senior housing and services adviser at HUD, told me
there’s legal precedent for these kinds of eligibility concerns and
that his agency is working closely to provide technical assistance to
states [[link removed]].

When asked if he thinks Medicaid could one day fund rent for longer
than six months, Tsai, of CMS, emphasized the importance of getting
data first from these pilots. “It’s a huge first step,” he said.
“No one believes Medicaid is here to supplant or replace the role of
housing and nutritional agencies, but at the same time, clearly
there’s a better way.”

The cost-effectiveness gamble

One undoubtedly appealing aspect of the policy proposal is that by
paying for housing, Medicaid spending could ultimately go down over
time, similar to how it worked with Arizona’s smaller program.
It’s well-documented that people experiencing homelessness use
significantly more health care resources on average than people with
stable housing.

Proponents point to some encouraging research to back the idea, like a
California permanent supportive housing program that reduced the use
of expensive medical care
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in a roughly 20 percent net savings of total public cost.
Another program
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New York reduced inpatient hospital days by 40 percent, inpatient
psychiatric admissions by 27 percent, and ER visits by 26 percent.

But other research evidence is less persuasive. One literature review
published in 2022
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“mixed and mostly low-certainty evidence” that interventions to
drive housing affordability and stability led to improved adult health
outcomes. Another study published this month
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participants had no difference in ER visits, inpatient use, or chronic
disease control, but did report real mental health improvements,
particularly from housing providers who showed them compassion.

“The success of health care–based housing interventions must not
be judged solely by short-term chronic disease control and changes in
health care use,” the study authors argued. “Given the complexity
of US health care systems, innovations often struggle
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investment ... [and] had our evaluation measured only health care use
and chronic disease control, we would have overlooked the strong
relational connection between patients and their advocates and missed
the housing program’s possible effects on the social burden of
disease in the current epidemic
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social isolation in the US.”

Paula Lantz, a professor of health policy at the University of
Michigan, told me she’s very supportive of Medicaid programs getting
into housing interventions but has doubts about whether it will
ultimately reduce costs, and notes there are moral challenges of
really studying that question over time. “If you have a bunch of
people in a control group who you know need services and help and
you’re using them for research, the longer [they’re denied help],
the larger the ethical issues there are,” she said.

Lantz says she worries that if the waivers don’t save Medicaid
money, critics might seize on that to attack health care spending more
broadly. Demyan, the assistant director with Arizona’s state
Medicaid program, told me he would not be surprised if there’s “an
initial bump in increase in cost of care” as states transition to
this new model.

And what if it’s not, ultimately, cost-effective?

Tsai, the federal Medicaid official, said he’s confident there are
“inefficiencies” in the system, and that governments can use
funding in “wiser” ways to target certain groups of people. He
also stressed the need to think about public savings over time, to
remember some that many of the country’s biggest health disparities
didn’t happen overnight.

Still, Tsai acknowledges, there is currently a lot of “unmet need”
in health care, and saving money isn’t the only thing that matters.
“That is why we want to evaluate very objectively,” he said,
“and why we want to look at both health outcomes and cost.”

_[RACHEL M. COHEN [[link removed]] is a
senior reporter for Vox covering social policy. She focuses on
housing, schools, labor, criminal justice, and abortion rights, and
has been reporting on these issues for more than a decade.]_

* Housing
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* rent
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* Medicaid
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* Healthcare
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* rental assistance
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* Emergency Rental Assistance Program
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* Housing is Health Care
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* homelessness
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* Biden Administration
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* Arizona
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* Oregon
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