Health Advice



Is housing health care? State Medicaid programs increasingly say 'yes'

Angela Hart, KFF Health News on

Published in Health & Fitness

States are plowing billions of dollars into a high-stakes health care experiment that’s exploding around the country: using scarce public health insurance money to provide housing for the poorest and sickest Americans.

California is going the biggest, pumping $12 billion into an ambitious Medicaid initiative largely to help homeless patients find housing, pay for it, and avoid eviction. Arizona is allocating $550 million in Medicaid funding primarily to cover six months of rent for homeless people. Oregon is spending more than $1 billion on services such as emergency rental assistance for patients facing homelessness. Even ruby-red Arkansas will dedicate nearly $100 million partly to house its neediest.

At least 19 states are directing money from Medicaid — the state-federal health insurance program for low-income people — into housing aid and addressing the nation’s growing homelessness epidemic, according to the Centers for Medicare & Medicaid Services. Even though there’s little agreement that this will provide a long-term fix for vulnerable patients’ health or housing, the Biden administration is encouraging other states to jump in. Several are in the pipeline, including Tennessee, West Virginia, and Montana — and New York got the green light from the federal government in January.

Using health care funding to house people is “a big philosophical debate,” said Alex Demyan, assistant director of Arizona’s Medicaid agency. “We know health care can’t solve all the problems, but we also know that housing agencies are maxed out and we have enormous need to help stabilize people.”

Homelessness jumped 12% in the U.S. last year, to an estimated 653,104 Americans, the highest level on record, even as the nation dramatically increased its inventory of permanent housing and temporary shelter beds.

As people languish on the streets, often struggling with addiction, severe mental illness, and untreated chronic diseases, health care officials and political leaders are turning to health insurance money for relief. They argue that housing aid will improve health and save taxpayer money by keeping people out of institutions such as nursing homes, hospitals, and jails.


But evidence supporting this argument is mixed.

For instance, in a trial by researchers at the University of California-San Francisco, homeless people in Santa Clara County, California, who were randomly assigned to receive long-term housing and services used the psychiatric emergency department 38% less than a control group over four years while increasing their use of routine mental health care. But participants were still hospitalized at high rates and continued to rely on the emergency room for routine medical care or rest.

State Medicaid programs have long dabbled in housing, but with the blessing and encouragement of the Biden administration, they are launching more services for more people with heaps of new state and federal money. The trend is part of a broader White House strategy that encourages Medicaid directors to offer social services alongside traditional medical care, with the goal of making their residents healthier.

“A health care dollar can do more than just pay for a doctor visit or hospital stay,” Xavier Becerra, secretary of the U.S. Department of Health and Human Services, told KFF Health News. “We should be using the federal health care dollar for wellness care: Get them before they get ill, and keep them healthy. Is there anyone who would deny that someone who is homeless is going to have a harder time also keeping their health up than someone who is housed with running water and heat?”


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©2024 KFF Health News. Distributed by Tribune Content Agency, LLC.


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