Gavin Newsom, whose administration is struggling to contain a worsening homelessness crisis despite record spending, is attempting something audacious: wiretapping federal

healthcare

Funding to cover rent for the homeless and people at risk of losing their homes.

States can’t use federal Medicaid dollars to pay rent directly, but California governor is asking the president’s administration to do so

joe

Biden, a fellow Democrat, to authorize a new program called transitional rent, which would provide up to six months’ rent or transitional housing to low-income individuals dependent on the states

healthcare

safety net a new initiative in its arsenal of programs to combat and prevent homelessness.

I’ve spoken to the president. We can’t do this alone, Newsom told KHN.

The governor is pressuring California’s version of Medicaid, called Medi-Cal, to fund experimental housing grants for the homeless, betting it’s cheaper for taxpayers to pay the rent than to keep people in crisis or expensive institutional care in hospitals, nursing homes , and prisons. Early in his tenure, Newsom proclaimed that doctors should be able to write prescriptions for housing in the same way they write prescriptions for insulin or antibiotics.

But it’s a risky business in an expensive state where the average rent is nearly $3,000 a month, and even higher in coastal areas, where most of California’s homeless live. Experts expect the Biden administration to scrutinize the plan; and also question its potential effectiveness in the face of the state’s housing crisis.

Part of the question is whether this is really a Medicaid job, said Vikki Wachino, who served as national Medicaid director in the Obama administration. But social factors, such as inadequate housing, are recognized as driving health outcomes, and I think the federal government is open to developing approaches to address that.

Bruce Alexander, a spokesman for the Centers for Medicare & Medicaid Services, declined to say whether the federal government would approve California’s request. Bidens Medicaid officials have approved similar experimental programs in Oregon and Arizona, and California is modeling its program after them.

California is home to an estimated 30% of the homeless in the US, despite representing only 12% of the country’s total population. And Newsom has acknowledged that the numbers are likely far greater than official homeless counts show. Top health officials say that to curb rising safety net spending and help the homeless get healthy, Medi-Cal has no choice but to combine social services with housing.

Statewide, 5% of Medi-Cal patients account for a whopping 44% of program spending, according to state data. And many of the most expensive patients lack stable housing: Nearly half of patients who are homeless visited the emergency room four or more times in 2019 and were more likely than other low-income adults to be hospitalized, and a vast majority of visits were covered by Medi-Cal, according to the Public Policy Institute of California.

What we have today is not working, said Dr. Mark Ghaly, secretary of the California Health and Human Services Agency, lays out his argument that housing is a critical part of

healthcare

. Why do we have to wait so long for people to be so sick?

The federal government has already approved a massive social experiment in California known as CalAIM that is transforming Medi-Cal. In five years, the initiative is expected to put $12 billion into new Medi-Cal services delivered outside of traditional health care. In communities across the state, it already funds services for some low-income patients, including paying rent guarantees for the homeless and those facing eviction; delivering prepared healthy meals to people with diabetes; and helping people formerly in prison find jobs.

The temporary rental program would add one more service to those already available, though only a small fraction of Medi-Cal’s 15.4 million enrollees actually receive those new and expensive social services.

Rent payments could begin as early as 2025 and cost about $117 million per year once fully implemented. And while state officials say anyone who is homeless or at risk of becoming homeless is eligible, not everyone who qualifies will receive new services due to capacity constraints. Among those benefiting are nearly 11,000 people already enrolled in Medi-Cal housing services.

The ongoing conversation is how to convince the federal government that housing is a health issue, said Mari Cantwell, who served as director of Medi-Cal from 2015 to 2020. have an equal number of people appearing in emergency departments and in long-term hospitalizations.

Health care experiments in California and across the country funding housing assistance have shown early success in reducing costs and making people healthier. But while some programs paid deposits or participants paid the first month’s rent, none directly covered rent for an extended period.

State health officials claim that paying six months’ rent will be even more successful in reducing healthcare costs and improving enrollee health, but experts say that to work, the initiative must meet strict accountability and be bundled with a range to social services.

In a precursor to the state’s current initiative, California experimented with a mix of housing assistance and social services programs through the Whole Care for Individuals pilot program. Nadereh Pourat, of the UCLA Center for Health Policy Research, evaluated the program for the state and concluded that local trials reduced emergency room visits and hospitalizations, saving an average of $383 per Medi-Cal beneficiary per year, a meager amount compared to the cost of the program. Over five years, the state spent $3.6 billion serving about 250,000 patients participating in local experiments, Pourat said.

A randomized control trial in Santa Clara County that provided supportive housing for the homeless showed reductions in psychiatric emergency room visits and improvements in care. Lives stabilized and we saw a huge rise in substance use and mental health care, the things that everyone wants people to use to get healthier, said Dr. Margot Kushel, director of the Center for Vulnerable Populations at the University of California -San Francisco at Zuckerberg San Francisco General Hospital and Trauma Center, who worked on the study.

But insurers implementing the broader Medi-Cal initiative say they are skeptical that spending healthcare money on housing will save the system money. And health experts say that while six months’ rent may be a bridge as people wait for permanent housing, there’s a bigger obstacle: California’s shortage of affordable housing.

We can design incredible Medicaid policies to alleviate homelessness and pay for all necessary support services, but without proper housing, it’s honestly not going to work, Kushel said.

Newsom acknowledges that criticism. The homelessness crisis will never be solved without first solving the housing crisis, he said this month, arguing that California should spend more money on housing for homeless people with severe mental illness or substance use disorders.

He announced on Sunday that he would ask the legislature to present voters with a 2024 ballot that would provide California’s mental health system with new treatment beds and supportive housing for people struggling with mental illness and substance use disorders, many of whom are homeless. are. The proposed bond measure would raise an estimated $3 billion to $5 billion for psychiatric housing and treatment villages aimed at serving more than 10,000 additional people per year. The initiative would also ask voters to set aside about $1 billion a year for supportive housing for a

existing tax on California millionaires

that funds local mental health programs.

For transitional rent, six months’ worth of payments would be available to select high-need residents enrolled in Medi-Cal, particularly those who are homeless or at risk of becoming homeless and those transitioning from more expensive institutions such as mental health crisis centers, prisons and prisons and foster care. Medi-Cal patients who are at risk of hospitalization or frequent emergency room visits are also eligible.

It’s a pretty big challenge; I’m not going to lie, said Jacey Cooper, the director of Medi-Cal. But we know that people who are homeless cycle in and out of the emergency room, so we have a real role to play in both preventing and ending homelessness.

For Stephen Morton, who lives in the community of Laguna Woods in Orange County, the journey from homelessness to permanent housing illustrates just how much government spending it can take to pay back the effort.

Morton, 60, bounced between shelters and his car for nearly two years, incurring extraordinary Medi-Cal costs through lengthy hospitalizations and repeated emergency room visits to treat chronic heart disease, asthma and diabetes.

Medi-Cal covered Morton’s open heart surgeries and hospital stays, which lasted for weeks. He landed temporary housing through a state-sponsored program called Project Roomkey before landing permanent housing through a low-income federal housing voucher, an ongoing benefit that covers all but $50 of his rent.

Since getting his apartment, Morton said, he’s been able to stop taking one diabetes medication and lose weight. He attributes improvements in his blood sugar to his housing and the healthy, home-delivered meals he receives through Medi-Cal.

It is usually scrambled eggs for breakfast and fish menu for dinner. I’m shocked it’s so good, Morton said. Now I have a microwave and I’m indoors. I am so grateful and so much healthier.

This story was produced by

KHN

an editorially independent KFF (Kaiser Family Foundation) news agency that provides in-depth coverage of health issues.