Medicaid and Permanent Supportive Housing for Chronically Homeless Individuals: Emerging Practices From the Field. 1. Introduction


When the Federal Government first committed to ending chronic homelessness in 2003, it understood that permanent supportive housing (PSH) would be a big part of reaching that goal. Since then, federal and other resources have helped to add more than 140,000 PSH beds, bringing the PSH-bed total to 284,298 in January 2013.5 The impact of these new units is evident: the number of people with histories of chronic homelessness found in unsheltered locations decreased by about 25 percent between 2007 and 2013 (HUD 2013).

Going forward, an understanding of Medicaid's potential as a funding source for PSH services is especially important because eligibility for Medicaid expanded dramatically on January 1, 2014, in 25 states and the District of Columbia. Because they are very poor, most people experiencing homelessness are Medicaid-eligible as a result of the expansion, even if they were not eligible under the rules that applied in 2013 and earlier.

In anticipation of changes stemming from the Affordable Care Act, the U.S. Department of Health and Human Services (HHS), Office of the Assistant Secretary for Planning and Evaluation (ASPE), hired Abt Associates in October 2010 to conduct a study to explore the roles that Medicaid, Health Centers, and other HHS programs might play in providing services linked to housing for people who experienced chronic homelessness before moving into PSH. This study examined three pieces of a complex puzzle that if assembled correctly can end chronic homelessness: (1) chronic homelessness itself; (2) permanent supportive housing; and (3) Medicaid's potential to fund health-related supportive services. It looked at program innovations already in practice, because the best indicators of Medicaid's potential usefulness to people experiencing homelessness are the ways that today's providers are using Medicaid to cover some of the support in supportive housing; that is, health and behavioral health care for people who have been chronically homeless and are now living in PSH.

Findings reported here are based on more than two years of observing developments in six communities.6 Each community has been pursuing at least one of several innovations, many of which are still evolving, including (1) early expansion of eligibility based on Affordable Care Act income rules (Connecticut, District of Columbia, and Minnesota); (2) Medicaid waivers to create coverage for low-income people through new types of health plans that offer a "bridge" to the expanded coverage available under the Affordable Care Act (Cook County, Illinois; Los Angeles County; and the State of California); (3) linking Medicaid-covered mental health and behavioral health services to housing assistance to create PSH; (4) expanding the types of services covered by Medicaid (Louisiana, Minnesota); (5) involving Health Centers (Chicago, Los Angeles); (6) expanding the role of managed care (District of Columbia, Louisiana, Minnesota, and Los Angeles); and (7) developing entirely new structures for integrating physical and behavioral health care with links to housing (Chicago, Minnesota).

This report focuses on the innovations that are primarily mechanisms for coordinating and integrating health care (for physical, mental, and substance use conditions) and supports to help people get and keep housing. The impetus for these innovations is the increasingly widespread recognition that people with complex needs require integrated care for better health outcomes, better patient and client experiences, and more cost-effective care. Our study leads us to the following conclusions:

  • Many useful approaches are being pioneered in study communities. Using Medicaid to fund services needed by PSH tenants is complicated, but it can be done.

  • Medicaid will not cover every service, but it can be a vital funding source for some of the services needed by PSH tenants.

Many types of Medicaid providers--including Medicaid managed care organizations, Health Centers, behavioral health providers, and Accountable Care Organizations--are playing important roles.

Conditions are ripe for improving care coordination and services integration, but achieving these goals will take the work of many parties. Some communities are already experiencing the benefits from Medicaid expansion, both from Medicaid covering services for individuals who are homeless and from local and state resources being freed up to fund nonreimbursable PSH program costs.

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