Health as housing: Medicaid may look to cover supportive housing

November 21, 2018

It should come as no surprise, but whether an individual has access to safe, affordable housing is an important indicator of health and well-being. Numerous studies have found that “individuals who are homeless have disproportionately high rates of health problems.”

Many states and health providers are trying to find ways to address homelessness as one of the social determinants of health, which are non-clinical factors such as housing, nutrition, or employment that can have an impact on a person’s health. Many health providers are recognizing that patients who are homeless are more likely to visit the emergency room, have longer hospital stays, and be readmitted within 30 days. More payers, particularly Medicare and Medicaid, are penalizing hospitals by reducing reimbursement if they have high rates of readmissions.

Supportive housing combines affordable housing units with wrap-around medical and social services—in other words, an individual in need can receive support services directly on-site in the housing unit or complex. Unlike some other models of affordable housing, supportive housing is not time-limited “and is targeted toward individuals and families with chronic illnesses, disabilities, mental health issues, or substance use disorders who have experienced long-term or repeated homelessness.”

Medicaid can be a key component of such projects: if tenants are eligible for Medicaid— which is often the case in states that have expanded Medicaid coverage under the Affordable Care Act— states may be able to receive matching federal dollars for their costs for health and support services. Medicaid cannot pay for rent, but the Center for Medicaid and Medicare Services (CMS) issued guidance in 2015 to identify areas where states could use Medicaid funding to provide housing-related services. For example, the Massachusetts Alliance for Supportive Housing and the Massachusetts Behavioral Health Partnership head an initiative that uses Medicaid funds to pay for on-site healthcare services for as many as 800 supportive-housing tenants across Massachusetts.

Even so, proponents of supportive housing note there are barriers to overcome, such as financing the upfront costs that Medicaid managed care organizations and housing complexes need to make. Recognizing this opportunity, the federal government seems to be readying changes to make such opportunities easier: at a November 14 presentation, U.S. Health and Human Services Secretary Alex Azar suggested that CMS through its Innovation Center may consider pilots to give health systems more flexibility to use Medicaid dollars toward supportive housing. CSG/ERC will watch for future announcements and offer updates as they become available.

Look for social determinants of health to be discussed in the CSG/ERC health committee as part of the next ERC annual meeting from July 28-31, 2019, in Pittsburgh. For additional thoughts or questions on this or related health topics for the annual meeting, please feel free to contact me.

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