Medicaid and Permanent Supportive Housing for Chronically Homeless Individuals: Emerging Practices From the Field. 1.3. The Context for Innovation


The approaches described in this report are being developed and implemented in a period of dramatic change and challenging circumstances. During the transitional period before the Affordable Care Act was fully implemented, stakeholders at all levels were attempting to sustain programs in a lean fiscal climate while designing new strategies that may work very differently in the future. Before proceeding to the details of our findings, we review some key elements of the federal, state, and local context influencing efforts to integrate care and link services with housing assistance for people with complex medical and behavioral health needs and extensive homeless histories.

1.3.1. State Priorities and Constraints

During the period covered by this research, late 2010 through 2012, state budgets were under tremendous pressure: unemployment rates were high; state tax revenues fell; and many state and local governments were forced to cut staff and reduce services. Funding for Medicaid benefits and funding for flexible services from other sources were among the cost areas under pressure. State officials were trying to manage existing programs and respond to new mandates with fewer staff. The U.S. Supreme Court's review and ruling on the Affordable Care Act and the 2012 presidential election contributed to the uncertainties experienced at the state and local level. Over the past several years in most of the states participating in this study, Medicaid program leaders and other state officials were consumed by the many tasks related to preparing for the full implementation of the Affordable Care Act in 2014, and they often talked about having "limited bandwidth" to pursue other program initiatives at the same time.

The commitment of state leadership to pursuing change is important to the progress we report in the six case study sites. For example, in Louisiana, the state's Department of Health and Hospitals was already committed to a complete redesign of its services for individuals with disabilities, including multiple waivers and state plan amendments. The state then made a commitment to HUD to guarantee that PSH services that received post-Hurricane Katrina Community Development Block Grant (CDBG) funding would be sustained. The state plays a key leadership role in Minnesota as well, where the Department of Human Services first designed and implemented a Health Care Delivery System demonstration that began in 2011, and recently designed a proposed Reform 2020 Section 1115 Medicaid waiver proposal that included many elements that could help pay for care coordination, housing stabilization, and integration of services. In other case study communities, philanthropic organizations, advocates, PSH providers, and representatives from local government have taken more prominent roles, working with state leadership to gain support for innovative approaches.

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