Medicaid and Permanent Supportive Housing for Chronically Homeless Individuals: Emerging Practices From the Field. 3.2. Building Safety Net Capacity


In addition to providing coverage for health benefits for many uninsured low-income people who would not otherwise qualify for Medicaid until 2014, the waivers expanded the base of financing for providers who are part of the health care safety net. This financing took the form of federal Medicaid funds that match state and county spending on health care services delivered to qualifying low-income people.

This new source of financing offered short-term help to some hospitals and other safety net health care providers at a time when state and local budgets were severely strained by the combination of declining tax revenues and rising demands for free or low-cost health care as a result of the recession. Perhaps more important, the payment mechanisms established through the waivers helped many of these hospitals and other health care providers prepare for the billing and payment systems they would need to have in place by 2014, when many of their currently uninsured patients would become eligible for Medicaid enrollment or for subsidized health insurance under the Affordable Care Act.

To reinforce the role of the waivers in building safety net capacity as a "bridge to reform," the waiver terms often required that newly covered patients receive many of the benefits that are generally associated with health insurance coverage. This often included assignment to a primary care provider to allow some level of trust and mutual knowledge to develop, to assure some level of care continuity, and to improve timely access to care.

Safety net health care providers face both opportunities and risks with full implementation of coverage expansions and other reform provisions of the Affordable Care Act. Many public hospitals and clinics serving people experiencing homelessness have relied on public funding through state or county budget appropriations and grants to cover the costs of serving these patients, who have typically lacked insurance in the past. These hospitals may also serve Medicaid beneficiaries and have systems in place for seeking Medicaid reimbursement, but it is likely that some safety net providers that deliver health care to indigent patients will have to augment existing systems. In addition, as states are most likely to place the newly eligible population into managed care, including most or all people who are or were experiencing homelessness, providers serving these populations may face the need to make substantial investments in administrative systems to support billing insurance companies, contracting with managed care plans, or obtaining Medicaid reimbursement on a fee-for-service basis as their patients obtain coverage through Medicaid or other insurance in 2014.

Another challenge to safety net health care providers is retaining their patient base when currently uninsured patients have a broader range of choices starting in 2014. Hospitals, clinics, and other safety net providers recognize that they will need to make improvements to become "providers of choice." If many newly insured patients choose to go elsewhere for care, some health care providers will find themselves in even worse financial shape, with continued responsibility for serving patients who remain uninsured and those who are too troubled or disabled to navigate other available options. These remaining patients will be more expensive to serve on average, and sources of funding for indigent, uninsured patients are likely to be reduced.

All of these changes are significant for both patients and the health care providers and systems that deliver health care services to low-income people. Los Angeles County's experience implementing its Low Income Health Program, Healthy Way LA, highlights some of the challenges and lessons learned during coverage expansion. In Cook County, Illinois, planning and start-up activities for CountyCare were just getting under way during our final visit to that community in December 2012. Leaders in this process were anticipating making some significant changes in Cook County's health care delivery system during 2013.

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