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Medicaid Works: Medicaid Is an Essential Partner for Supportive Housing

This is the next in our “Medicaid Works” blog series, which aims to inform the debate over Medicaid’s future by providing the latest facts and figures on this essential and popular part of the nation’s health care system.

Many people with severe mental illness or chronic physical health conditions struggle to find stable housing.  Supportive housing, which combines affordable housing with intensive, coordinated services, helps people with significant health care needs maintain housing and improve their health in a stable environment.  Despite the effectiveness of supportive housing, though, few of the people it would benefit most actually receive it.  While Medicaid doesn’t pay for housing, it can pay for many of the services essential to supportive housing’s success.  

Providing services for supportive housing is a good investment for Medicaid.  Research shows that supportive housing reduces the use of emergency health services by helping people get appropriate care in outpatient settings.  It also reduces costs of care for people with high health needs who frequently use emergency services. 

States can expand the availability of services for supportive housing through Medicaid by:

  • Adopting health reform’s Medicaid expansion.  Health reform enables states to expand Medicaid to cover nearly everyone with incomes at or below 138 percent of the poverty line, which includes most people who need supportive housing.  But 19 states haven’t expanded Medicaid.  In those states, only people with certain disabilities, seniors, and low-income families with children are eligible for Medicaid. 
  • Providing a broader range of Medicaid-funded services and supports, including help finding and maintaining housing.  States aren’t required to offer most of the health services available through Medicaid to help people stay in their homes, such as personal care services in the home and behavioral health care services, and many states don’t cover them. 
  • Establishing a process for supportive housing providers to receive Medicaid reimbursement.  Most supportive housing providers don’t bill Medicaid for services that Medicaid could pay for.  States and managed care organizations should provide training and outreach to encourage these providers to bill Medicaid for covered services. 
  • Using managed care more effectively.  Increasingly, states are relying on managed care organizations (MCOs) to provide and coordinate health benefits for Medicaid beneficiaries.  States can encourage or require MCOs to provide supportive housing services to those who need them.  Also, MCOs can work with supportive housing providers to make sure their members receive proper care.