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


Permanent supportive housing (PSH) offers subsidized housing for formerly homeless people with disabilities and chronic health conditions. It provides flexible and individualized support services that are offered to tenants, who can participate on a voluntary basis. PSH services focus on promoting long-term housing stability, recovery, and improved health. PSH service providers may deliver or coordinate access to treatment for health, mental health, and substance use disorders. PSH programs also directly provide case management services and supports to help people who are homeless obtain and retain housing. The housing component of PSH provides a platform for improving health and for changing patterns of health care utilization, with the appropriate use of health and behavioral health care replacing frequent use of emergency rooms and inpatient hospitalization. This in turn reduces the public cost burden of inappropriate use of crisis services.

When the Federal Government first committed to ending chronic homelessness in 2003, it was understood that 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 2013.1 The impact of these new units is evident: The number of people with histories of chronic homelessness found in unsheltered locations decreased by 25 percent between 2007 and 2013 (HUD 2013).

PSH programs use multiple funding sources to ensure that supportive services are available to their tenants. Medicaid reimbursement has often been used to pay for some of the services provided to some PSH tenants. Some PSH tenants who were enrolled in Medicaid were eligible to have some aspects of their health and behavioral health care covered even before Medicaid expansion under the Affordable Care Act. As of January 1, 2014, 25 states and the District of Columbia expanded Medicaid coverage to adults aged 18-64 if their household income was at or below 133 percent of the federal poverty level, as allowed under provisions of the law. The expansion means that many more PSH tenants as well as people still experiencing chronic homelessness because they have very low incomes are now eligible for Medicaid. Thus, understanding Medicaid's potential as a funding source for the services needed by Medicaid beneficiaries living in PSH is even more important now, for those newly eligible as well as for those 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), contracted with 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 for people who had experienced chronic homelessness before moving into PSH. This study examined the intersection of 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 services for people experiencing chronic homelessness or living in PSH. 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 support includes 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.2 Each community had 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 and housing stability 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 to serve PSH tenants is complicated, but it can be done.

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

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

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