Using Medicaid to Cover Supportive Housing, Improve Health

Supportive housing targets individuals who have experienced homelessness with chronic disease, disabilities, mental health issues, or substance use disorders. And with the expansion of Medicaid under the Affordable Care Act, the program can help address supportive housing needs. According to a policy brief from the Robert Wood Johnson Foundation published in Health Affairs, there are a variety of strategies states can use to leverage Medicaid funding for housing programs.

Housing and health are interconnected and people who are homeless have high rates of substance abuse and mental health disorders. They are also more likely to have diabetes, hypertension, HIV/AIDS, and other chronic conditions.

“Improving access to housing and the services needed to maintain housing can be a key component of improving health status for Medicaid beneficiaries,” wrote Amanda Cassidy.

Legally, Medicaid cannot cover rent, but states can choose to cover housing-related services, such as transition services, housing and tenancy sustaining services, and housing-related collaborative activities under Medicaid through the use of a waiver.

“Medicaid can play a key role in supportive housing by funding some of the services needed by residents, such as behavioral health care and substance abuse services, as well as regular medical care,” Cassidy wrote.

Medicaid usually covers these services, but in a supportive housing program those services might be provided in new settings or by nontraditional providers, she added.

By revising their state plan, which outlines the groups of individuals eligible for benefits, the services covered, and payment methodologies, states can choose to cover services that support housing and furnish supportive services by providers who care for the homeless population, and states can cover housing-related services, such as assistance in searching for a securing housing as well transition services. In addition, CMS’ Accountable Health Communities Model supports efforts to increase access to services that address health-related social needs.

While almost all states have a waiver to provide home and community-based services, most of those states make the services covered available to certain populations only. For instance, the elderly, the physically disabled, and people with intellectual or development disabilities are commonly covered. In contrast, people with mental illness are less likely to be eligible.

Another barrier is the state of Medicaid expansion across the country.

“To use Medicaid to support the broadest population that might be eligible for supportive housing, states need to have expanded Medicaid to include low-income, childless adults,” Cassidy wrote. “Individuals in states that have expanded Medicaid eligibility are more likely to be able to use Medicaid to access supportive services.