The Intersection of Health and Housing: Medicaid's Innovative Approach to Combat Homelessness

For over a decade, researchers and advocates have emphasized the intrinsic link between housing and healthcare.

This fall marks a crucial turning point as federal Medicaid funds will now be allocated towards paying rent—a significant shift in policy that could potentially transform the landscape of healthcare for vulnerable populations in the United States.

One of the key factors driving this momentous change is the alarming increase in rates of unsheltered homelessness and the soaring unaffordability of rents across the nation.

With homelessness reaching record highs in 2023, states are exploring the utilization of federal Medicaid dollars to provide rental assistance under a groundbreaking initiative approved by the Biden administration.

This initiative materialized through a Medicaid waiver program, allowing states to innovate and test new strategies to address social determinants of health.

The Centers for Medicare and Medicaid Services have acknowledged the critical role of housing in healthcare outcome since 2015, paving the way for using Medicaid funds for services such as moving costs and security deposits to help individuals secure stable housing.

The significance of housing as a determinant of health was further underscored during the COVID-19 pandemic when access to stable homes emerged as a crucial factor in preventing the spread of the virus.

The correlation between housing stability and healthcare outcomes has catalyzed states like Arizona and Oregon, the vanguards of this initiative, to leverage Medicaid funds for rental assistance.

Oregon, for instance, plans to target Medicaid beneficiaries at risk of homelessness, leveraging the new waiver to prevent economic, physical, and mental harm associated with housing instability.

In contrast, Arizona will focus on individuals with serious mental illness, as demonstrated by a successful state program that subsidized rent for Medicaid beneficiaries, resulting in reduced ER visits and hospital stays.

As states embark on this novel approach of using Medicaid funds for rent, challenges such as affordable housing shortages and the need for collaboration between various stakeholders loom large.

However, the potential transformative impact of this initiative cannot be understated, as it not only addresses the immediate housing needs of vulnerable populations but also holds promise for broader shifts towards more holistic healthcare models across the country.