Non-Elderly Disabled Category 2 Housing Choice Voucher Program: An Implementation and Impact Analysis

Executive Summary

Debra Lipson, Denise Hoffman and Matthew Kehn

Mathematica Policy Research

January 2014

The Housing Choice Voucher (HCV) program for institutionalized, non-elderly disabled (NED) people stems from the 1999 case Olmstead v. L.C. (527 U.S. 581), in which the U.S. Supreme Court declared that people with disabilities are entitled to receive services in "the most integrated setting appropriate." This ruling required states to expand options for individuals with disabilities to live in community residences rather than institutions such as nursing facilities. Key to making community-based independent living possible is the availability of affordable, accessible housing.

To help expand the availability of rental subsidies for disabled individuals admitted to institutions who would be at risk of longer stays without such assistance, the U.S. Department of Housing and Urban Development (HUD), in collaboration with the Centers for Medicare and Medicaid Services, funded 948 Category 2 HCVs for NED individuals (referred to as NED2 vouchers). HUD allocated these HCVs to 28 public housing authorities (PHAs) in 15 states in January 2011 and required each PHA to partner with its state health and human services (HHS) agency or the state Money Follows the Person (MFP) demonstration program. These collaborating entities would be responsible for arranging and coordinating access to the community-based services and supports voucher recipients would need after leaving institutional settings. Citing long waiting lists for regular HCVs and the major barrier presented by unaffordable housing to MFP programs, federal officials expected each NED2 voucher to be issued and leased (that is, used to rent a unit) within one year of the award and for the vouchers to have a positive impact on the overall rate of transition in the designated areas.

This report summarizes the major findings of an evaluation, conducted by Mathematica Policy Research under a contract with the U.S. Department of Health and Human Services, Office of the Assistant Secretary of Planning and Evaluation, of the implementation of the NED2 HCV program and its effects on enabling institutionalized individuals to make transitions to community housing.

The study had two specific objectives: (1) to identify effective implementation methods by examining the rate at which the vouchers were issued and leased overall and by site, comparing the implementation approaches used by the PHAs and their HHS/MFP partners, and analyzing patterns between implementation approaches and voucher distribution rates; and (2) to estimate the impact of the NED2 program on the rate of transition from institutions to community-based settings among the eligible population in selected sites.

The report is organized as follows. In Chapter I, we provide an overview of the origin and need for the NED2 voucher program and a brief description of its design. In Chapter II, we explain the methods and major findings from the implementation and process analysis, which examined trends in voucher distribution in 13 of the 28 PHA regions (those that were provided with more than 35 vouchers each), and describe the barriers to and facilitators of program implementation across the sites and within each one. In Chapter III, we present methods, data, and findings from the impact analysis on the rate of transitions from nursing facilities (nearly all voucher users initially resided in such settings and data were unavailable for those in other institutions) to the community in the eligible population in the five sites with sufficient and reliable data. In Chapter IV, we draw conclusions from both analyses to provide lessons that can inform and improve future policies and programs designed to help low-income NED individuals make successful transitions from institutions to the community. Chapter II, Chapter III, and Chapter IV are summarized briefly below.

Major Findings from the Implementation Analysis (Chapter II)

Based on reports from state and local officials about the shortage of affordable housing and rental subsidies for people with disabilities, it was widely believed that demand for HCVs targeted to the institutionalized population would be high and that the PHAs would issue and lease the vouchers relatively quickly. By December 2011, however--one month before the one-year anniversary of the awards--only about one-third of all the vouchers had been leased. In summer 2012, 18 months after the vouchers were awarded, nine of the 13 PHAs included in this analysis reported nearly all the vouchers leased, but in the other four between one-third and two-thirds remained unused.

The implementation analysis focused on 13 PHAs awarded at least 35 vouchers each to examine and compare the processes used by the PHAs and their state HHS/MFP partners to carry out the major program components: cross-agency coordination, staff training, outreach to and recruitment of potential applicants, referral and application processes, housing search assistance, and special accommodations. By comparing the ways in which these processes varied across sites and looking for patterns between them and rates of voucher distribution, we sought to identify factors that may have contributed to higher or more rapid voucher leasing. The major findings included the following:

• HUD granted PHAs broad flexibility in implementing the NED2 program, and, as a result, sites demonstrated variation in key program implementation steps, including initial efforts to inform and educate relevant staff, participant outreach and recruitment, and referral and application approval processes. Additionally, PHAs varied in the extent to which they adjusted their policies to accommodate the special needs of people with disabilities, such as policies concerning portability of vouchers to other PHA regions, voucher expiration extensions, and recipient "briefings" (that is, required meetings to convey voucher conditions and rules).

• Factors associated with quicker issuing and leasing of vouchers included strong lines of communication between managers and frontline PHA and HHS/MFP staff, a centralized or streamlined set of referral procedures, involvement of HHS/MFP housing specialists, and relaxed portability rules.

• Factors that contributed to lower levels of voucher issue and lease rates included a lack of communication between PHA and HHS/MFP staff, PHA rules restricting the portability of vouchers, and insufficient education and training of frontline staff during the initial months of the program.

• Program officials in all of the sites, including those that were more or less successful in issuing awarded NED2 vouchers, reported common challenges to the ability of voucher recipients to lease units, including a lack of affordable, accessible housing, landlords unwilling to hold units while community service plans were being set up, and bad credit or criminal history among voucher holders.

Major Findings from the Impact Analysis (Chapter III)

Building on the implementation analysis, the quantitative analysis describes the demographic, functional, health, time spent in an institution, and other characteristics of NED2 voucher users and estimates the impact of the availability of NED2 vouchers on community transition rates. Based on the availability of linked administrative and survey data, we focused on transitions from nursing facilities in the five PHAs that leased the highest numbers of NED2 vouchers in 2011. To estimate impacts, we calculated the change in probability of making transitions from nursing facilities to the community before and during the period of voucher availability among those eligible for NED2 vouchers in areas that received them and compared it to the change in probability for people residing in comparison areas that did not receive vouchers. Key findings included the following:

• The estimate of the impact of NED2 vouchers on transitions in the pooled Baltimore City, Baltimore County, and Cincinnati samples was positive, statistically significant, and large (8.7 percentage points higher than the period before the vouchers were available). For these areas, the estimated impact was consistent with the hypothesis that each voucher used represented a transition that would not have otherwise occurred. The impact in the pooled Snohomish County and Tacoma, Washington samples was neither substantial nor significant.

• NED2 voucher users were significantly less likely to be married (9 percent) than individuals who made transitions from nursing facilities to the community without vouchers (25 percent).

• NED2 voucher users had fewer functional limitations than nursing facility residents who did not use vouchers--both those who made transitions and those who remained in nursing facilities.

• The average length of stay in a nursing facility among NED2 voucher users (379 days) was significantly longer than among those who made transitions without vouchers (53 days).

• The majority of NED2 voucher users were male (62 percent) compared with just under half of non-elderly nursing facility residents who made transitions and did not use vouchers (47 percent).

Conclusions and Lessons for Future Policies and Programs (Chapter IV)

Findings from this evaluation suggest that the success of NED2 vouchers, and other programs that make housing subsidies available to people residing in institutions, hinges on how the vouchers are allocated and targeted. The impact analysis suggests that allocating vouchers to communities with low transition rates (for example, less than 25 percent) can result in large impacts on the number of transitions. Further, the largest impacts result from the distribution of vouchers within a site to individuals who would be unlikely to make transitions without such assistance. The characteristics of users suggest that voucher availability might be most effective for people facing barriers to independent living beyond the services that address their functional limitations, such as not having a home to which they might return or lack of family or other social supports.

The process analysis indicated that voucher distribution requires high levels of coordination and planning. Below, we have summarized lessons from the analysis that are important to efficient and effective program implementation:

• Ensure good communication and strong partnerships between PHA and HHS/MFP staff.

• Assign dedicated program staff and centralize monitoring of referrals, application status, and progress in--and barriers to--finding accessible housing units.

• Align the time line for voucher use with the filling of program startup needs, which can take a long time in PHAs that have not previously had specialized vouchers of this type and need to develop working relationships with Medicaid and local care coordination agencies.

• Employ HHS/MFP housing specialists with knowledge of both housing and Medicaid program policies to ensure they work together to accommodate the needs of people with disabilities.

• Relax rules governing voucher portability to enable people with disabilities to use the vouchers in communities that can best address their housing and social support needs.

Even PHAs and HHS/MFP partners with demonstrated capacity to support NED2 voucher programs may encounter many barriers to finding affordable and accessible housing units. Efforts to overcome these barriers may be worth the investment if the total costs to Medicaid, Medicare, and HUD/PHAs of supporting such individuals in the community are less than the cost of paying for longer stays in institutions.