Health, Housing, and Service Supports for Three Groups of People Experiencing Chronic Homelessness. Highlights


In 2014, nearly all chronically homeless people who are currently uninsured will become eligible for Medicaid, along with millions of other poor people. Homeless people with complex health and behavioral health conditions need a wide range of health and other services and supports if they are to get and keep housing, pursue recovery, manage chronic health conditions, and stay out of hospitals. ASPE wanted to learn about how the nation’s most innovative providers currently use Medicaid and other federal resources to provide needed care.

Using the Knowledge Gained to Guide Policy

The Federal Government has a goal of ending homelessness for all chronically homeless people by 2015. A key strategy to reach that goal is PSH, which offers formerly homeless people with disabilities a permanent home along with the health care and other supportive services needed to keep it. Medicaid is one of the sources of funding currently used to cover the costs of the service element of PSH. Knowing the issues arising from current uses of Medicaid for this population can help guide Medicaid policy development under the ACA toward structures that assure appropriate care for formerly homeless disabled occupants of PSH.

What Medicaid Does Now for Chronically Homeless People

At best, only about 1 in 4 homeless people living on the streets are currently enrolled in Medicaid, despite being extremely poor and usually in very bad health. For homeless people with disabilities who have been lucky enough to move into PSH, Medicaid is one of the three biggest funding sources for the health and supportive services that help them regain health and keep housing.

Not All Chronically Homeless People Have Equal Access to Medicaid

Chronically homeless people’s health conditions and the likelihood that they currently receive the services they need are heavily interrelated. Certain conditions require different types of care than others, and those same conditions make it more or less likely that Medicaid will be available to help cover the service costs. The chronically homeless population can be divided into three groups, differentiated by two factors--having a serious mental illness (SMI) that would meet the medical necessity criteria for receiving specialized mental health services, and being enrolled in Medicaid. Both factors have implications for access to care, and especially for what types of agencies are most likely to serve group members. The three groups of chronically homeless persons are:

  • Group 1: Persons who are notenrolled in Medicaid and do not have a qualifying mental illness.1

  • Group 2: Persons who are enrolled in Medicaid but do not have a qualifying mental illness. This group includes people who may have severe physical health conditions as well as trauma-related emotional conditions, substance use disorders, and/or types of mental health disorders that do not meet medical necessity criteria for specialized services.

  • Group 3: Persons who are enrolled in Medicaid and do have a SMI that meets medical necessity criteria for specialized services. People in this group may also have co-occurring health or substance use conditions.

Different Agencies Serve the Different Groups

Housing and supportive services for people in Groups 1 and 2 are most likely to be provided by agencies in a community’s homeless assistance network, including PSH providers funded through the U.S. Department of Housing and Urban Development, health providers such as Health Care for the Homeless and CHCs that receive some funding from HHS’s Health Resources and Services Administration, and public crisis/emergency services such as hospital emergency departments. The people in Group 3 are the most likely to be served by public and non-profit mental health service agencies.

Differential Likelihood of Receiving Permanent Supportive Housing

The greatest array of funding sources are available for people in Group 3, and they are thus the most likely to become tenants of PSH and to receive the most comprehensive array of health care and supportive services while there. In addition to Medicaid, mental health-specific funding comes from contracts through state and local public mental health agencies and federal resources through HHS’s Substance Abuse and Mental Health Services Administration.

Challenges in Using Medicaid as a Way of Funding Supportive Services in Permanent Supportive Housing for Chronically Homeless People with Disabilities

Providers face many challenges as they try to obtain through Medicaid a significant proportion of the resources they use to deliver health care, case management, and behavioral health services to support tenants in PSH. Among these challenges are:

  • Establishing Medicaid eligibility for clients likely to qualify, following procedures, assembling the required documentation.

  • Qualifying as a Medicaid provider.

  • Covering the often-extensive time commitments needed to engage and serve the target population.

  • Covering the time it takes to coordinate care and services across primary care, mental health care, substance abuse treatment, and housing needs, often provided by different agencies.

  • Coordinating care for people with multiple issues when different funding streams for different types of Medicaid-covered benefits have different eligibility criteria, different facility requirements, different billing and reporting schedules, different definitions of medical necessity, and other divergent practices.

  • Dealing with restrictions on visits per day, location of care (e.g., within clinic walls or in people’s homes), credentialing (e.g., who can deliver Medicaid-reimbursed services), and similar issues.

Despite these challenges, health and behavioral health care providers in many communities are working to deliver quality care and support services that help chronically homeless people end their homelessness and take steps toward recovery and stability in housing, seeing this approach as a cost-effective alternative to the revolving door of streets, shelters, hospitals, detox facilities and jails. Increasingly many of these providers are relying on Medicaid reimbursement to cover a portion of the costs of the services they deliver, and looking for ways to provide more integrated and effective care to all of the chronically homeless people who need PSH.

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