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Using Medicaid to Support Services in Supportive Housing: New Opportunities
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Medicaid expansion under the Affordable Care Act provides new opportunities to lower Medicaid costs and improve health outcomes. States and communities can use Medicaid to provide services to formerly homeless residents of supportive housing.
Using Medicaid to Support Services in Supportive Housing: New Opportunities


In most states, single adults who are homeless are not currently eligible for Medicaid. Also, many service providers have been reluctant to adopt Medicaid services and billing standards. However, in 2014, most individuals who are homeless will become eligible for Medicaid under the Affordable Care Act (ACA). States and communities will face challenges in caring for these individuals. The authors of this policy brief discuss how Medicaid-funded care management in supportive housing can help.

Individuals with Costly, Complex Needs

Individuals who will be covered by Medicaid starting in 2014 will likely have many unmet health needs. For example, most people (82 percent) in supportive housing have a mental or physical disability (see The 2010 Annual Homeless Assessment Report to Congress). Individuals with chronic health problems who lack regular care are expensive to treat. This provides incentives for states to manage health care for these people in order to control Medicaid costs.

Supportive Housing Works

At the same time, supportive housing has been successful and cost effective. Research shows that connecting health care management with supportive housing improves health outcomes (see Summary of Studies). It also lowers costs that can result from emergency care services. Supportive housing may save costs in other systems (e.g., criminal justice) as well. Funding the services component of supportive housing continues to be a challenge, however. Federal, private, and other funds may have time limits and be subject to budget cuts.

The Affordable Care Act Expands Medicaid Options

Many of the services provided in supportive housing fit into Medicaid service categories. These include “case management,” “rehabilitative,” or “home- and community-based services.” A recent analysis suggests that up to 85 percent of such services may be reimbursable under the Medicaid program (see Understanding Supportive Housing Services and Potential Medicaid Reimbursement, Connecticut).

The ACA will help states and communities fully access the benefits of Medicaid. Two new options under the ACA are:

  • Health Home State Plan Option. The ACA established a new Medicaid state plan option for health home services. This benefit is for people enrolled in Medicaid who have chronic conditions. People with mental illnesses, substance use disorders, and other chronic conditions are a high priority. States that use this option will receive a 90 percent federal funding match for eight quarters. Homelessness by itself is not a condition for health home eligibility. However, many supportive housing residents have the chronic conditions that qualify.
  • Home- and Community-Based State Plan Option 1915(i). Section 1915(i) of the Social Security Act was authorized by the Deficit Reduction Act of 2005 and amended by the ACA. It allows states to offer home- and community-based services (HCBS) to individuals who do not meet the criteria for participants in a 1915(c) HCBS waiver. The ACA broadens the scope of services and target populations that may be covered under this option.

Both Medicaid rehabilitative and targeted case management options can be used to fund services for people in supportive housing. States may also work with Medicaid managed care organizations to provide services in supportive housing.

State Approaches Will Vary

Every state will be different in how it uses Medicaid-funded care management in supportive housing. States will need to decide which Medicaid payment methods to use. They may also need to help supportive housing providers meet Medicaid’s billing and reporting requirements. In addition, states will need to track and manage costs for individuals who are chronically homeless.

A Win-Win Proposition

Providing Medicaid-funded care management services in supportive housing is a win-win proposition. States can begin to “bend the cost curve” by providing services that increase housing stability and improve health outcomes. In Medicaid, supportive housing providers gain a more consistent, secure source of service funds. They can use these funds to support additional housing units. And the individuals served in supportive housing are the ultimate winners.

What You Can Do Today

  • Be at the table. On June 28, the U.S. Supreme Court upheld the Medicaid expansion. States will need to ramp up quickly to address an influx of new Medicaid patients. Be at the table to ensure that the needs of people who are homeless are considered.
  • Collect data. Your Medicaid partners will want to know who you serve and what their needs are.
  • Make the business case. Be prepared to show your Medicaid partners that they can save money by using Medicaid to serve residents of supportive housing.
  • Seek technical assistance. Your state Medicaid office, Continuum of Care lead agency, or federal project officer may be able to help. See the related items to the right for more information.
  • Share your successes. Nothing succeeds like success. Be willing to showcase how using Medicaid is helping your clients recover.

Check out the "Related Items" to the right of the screen.

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