Medicaid and Permanent Supportive Housing for Chronically Homeless Individuals: Emerging Practices From the Field. 5.1. Introduction


Among the individuals experiencing chronic homelessness, people with a diagnosis of serious mental illness (SMI) may be the most likely to benefit from supports funded in part through Medicaid. This is true for at least these four reasons:52

  1. Public Agency Responsibility: State and local mental health authorities are charged with ensuring the well-being of this group of people. These agencies have historically been responsible for arranging mental health services and long-term residential care for their SMI clients, so it has been possible for the agencies to extend those responsibilities to include people with SMI who are chronically homeless and to develop or contract for services in PSH. People with disabling physical conditions or substance use disorders do not have a public agency with similar responsibilities for their well-being.

  2. SSI Income: Mental illness that falls within specified diagnoses and creates a significant level of functional disability qualifies people for Supplemental Security Income (SSI)--a critical source of financial support.53 SSI provides an income from the federal program, as well as supplements for certain types of housing arrangements in some states. With SSI income, people with mental illness who are chronically homeless can help pay for their own housing, making it more financially feasible for mental health service agencies to offer housing.

  3. Medicaid Eligibility: SSI beneficiaries are categorically eligible for Medicaid and often for specialty mental health services available through different components of a state's Medicaid plan. In turn, Medicaid provides a funding source for services that supplement state or county mental health contracts and federal grants, if the service providers already are or are able to become certified as Medicaid providers.

  4. Research Evidence and Evidence-Based Practices: Since the early 1990s, the National Institute of Mental Health, Robert Wood Johnson Foundation, Conrad N. Hilton Foundation, and other funders have invested in research to document what works to end homelessness for people with mental illness. The results are a body of knowledge that can guide practice and reassure potential funders of likely success.

This chapter describes the ways that Medicaid helps pay for mental health service arrangements connected to PSH in four of our case study sites: California, Illinois, Minnesota, and the District of Columbia.54 It looks first at who qualifies to receive these services and then at the array of services they qualify for. Understanding who qualifies and what they qualify for is important because different levels of functional impairment are needed to qualify for different levels of service. After a brief general description of the factors that go into determining who qualifies, we examine the most common levels of care and the level of impairment they are designed to address.

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