If Housing Is a Health Care Issue, Should Medicaid Pay the Rent?

“You can find agencies and leaders of agencies all around the country who are finding creative ways to navigate around the failures of other systems,” said Steven Banks, who sued the city and won the universal right to shelter on behalf of the city’s homeless before he became commissioner of New York City’s Department of Social Services himself.

But he argues these workarounds would be unnecessary if the federal government did more. Making housing vouchers an entitlement would be a huge step forward, Banks said. “And it would result in significant progress if Medicaid dollars could be used for rental assistance in addition to services to help people regain stability in their lives when living with significant mental health challenges,” he added.

A right to housing?

The federal government is a long way from viewing housing as a health care right, but a 1999 Supreme Court decision, Olmstead v. L.C., nudged it in that direction. The Court ruled that people with disabilities, including serious mental illness, have a right to a living situation that is as integrated into their community as possible. In the years after that ruling, progress was slow, in part because of a longstanding question: Whose responsibility was it to pay for community-based housing?

Then, during the Obama administration, officials saw an opportunity for Medicaid to help, said Vikki Wachino, who was the director of the Center for Medicaid and CHIP Services at the time. In 2015, a year after the Affordable Care Act went into effect, which made millions more Americans eligible for Medicaid, Wachino sent a memo to state Medicaid directors encouraging them to use funds to help comply with the Olmstead ruling. She noted that Medicaid could pay for support services people needed to succeed in their own homes, including things that weren’t strictly medical, like searching for an apartment, resolving issues with landlords, paying security deposits, first month’s rent and furniture costs. Medicaid still couldn’t be used to pay rent month to month, but the memo set off a wave of interest in using it to address housing issues.

Today 27 states offer some kind of housing support through Medicaid and many specifically try to reach people who are experiencing or on the verge of homelessness. “Only recently has the federal government said you can use Medicaid to help people find a unit, move them in, buy furniture,” Culhane said. “That’s important because the No. 1 federal dollar in every state is Medicaid. We have to make that program work to help solve homelessness.”

Not everyone agrees that Medicaid should pay for housing, and paying for Medicaid already accounts for a large chunk of state budgets. Jennifer Ho, a former senior adviser at HUD as well as deputy director of the United States Interagency Council on Homelessness, feels it’s not right to pin that responsibility on the health sector. The deep pockets of the health care system are “not infinite,” she said. “And it’s dealing with its own cost pressures, like the fact that we have the most expensive health care system in the world.”

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