A Home And Healing: How Medicaid Improves Health And Lowers Costs Among Members Experiencing Homelessness

Introduction

Over recent years, numerous states have implemented Medicaid initiatives aimed at enhancing health outcomes and controlling costs among the growing subset of members with complex health conditions who experience homelessness. Evidence demonstrates that interventions pairing care management with housing assistance not only improve health outcomes but also reduce costs. Consequently, these states have started covering services under Medicaid that help unhoused members connect to housing, yielding promising results. Without these services, states' ability to effectively meet the health and needs of these members is limited and will result in deteriorating health, premature mortality, and rising health care costs. This paper explores the reasons and methods behind state Medicaid programs' efforts to improve health and reduce costs for homeless members and how those efforts increase quality of care and affordability for the Medicaid program.

Ronald's Story

By the time he was referred to the Illumination Foundation in December 2022, a provider of housing and health services for people experiencing homelessness, Ronald had been experiencing homelessness across California's Orange County for more than a year.¹ He had had five emergency department visits and hospital admissions in the last six months alone due to complications related to diabetes mellitus. At each visit, the hospitals could do little more than help stabilize Ronald's acute symptoms. What Ronald really needed was a stable home so that he could engage in regular insulin therapy, have better nutrition, monitor his blood sugar, and rest.

If Ronald had been referred to Illumination a few years ago, he likely would have been referred to an emergency shelter, where he would remain on a years-long waiting list for housing assistance. While homeless, Ronald would inevitably continue to experience complications from his diabetes and other conditions like lower back pain. He would have continued to use the emergency department, require hospital admissions, and experience worsening health. People experiencing homelessness with chronic conditions like Ronald tend to die 20 years earlier than someone with the same condition who is stably housed.²

Fortunately, Ronald has had a different experience. That's because California is one of several states pursuing Medicaid initiatives helping Medicaid enrollees like Ronald address their health needs by attending to their housing needs. Through its CalAIM (California Advancing and Innovating Medi-Cal) initiative, California's Medicaid program, known as Medi-Cal, is covering a range of services and supports (PDF) to help eligible members experiencing homelessness find and maintain stable housing, connect to care and treatment, and avoid emergency departments and hospitalizations. These services include: 

• Enhanced Care Management — comprehensive care management and coordination for eligible members with complex needs
• Housing Transition Navigation Services — assistance with finding, applying for, and obtaining housing, based on an individualized assessment of needs A Housing Tenancy Sustaining Services — assistance to help members maintain stable tenancy including assistance with independent living skills, understanding and complying with lease terms, ensuring health and safety, crisis intervention, and conflict resolution
• Recuperative Care (also called Medical Respite) — a short-term residential setting providing ongoing monitoring for a medical or behavioral health condition for members experiencing homelessness and recovering from an injury or illness
• Short-Term Post-Hospitalization Housing — provides members exiting an institution and experiencing or at risk of homelessness with a shortterm residential setting to continue their medical/ psychiatric/substance use disorder recovery immediately after exiting the institution
• Day Habilitation — services provided in a home or other community-based setting that help members acquire, retain, and improve self-help, socialization, and adaptive skills necessary to reside successfully in the person's natural environment
• Housing Deposits — help with identifying, coordinating, securing, or funding one-time services and modifications necessary to enable a person to establish a basic household
• Transitional Rent — provides up to six months' assistance with rent for people experiencing or at risk of homelessness and exiting institutional care, as a means of facilitating transition to permanent housing³

Because of CalAIM:

• Ronald was admitted to Illumination Foundation's Recuperative Care program.
• While there, Ronald was referred to and approved to receive Housing Transition Navigation Services. 
• Because of a data sharing agreement between the Orange County Healthcare Agency and his MediCal managed care plan, Ronald's housing navigator learned that his medical needs and history qualified him as a person with a disability.
• Ronald's housing navigator helped him to apply for and obtain a Mainstream Voucher, a US Department of Housing and Urban Development rental subsidy for people with disabilities.
• While working with his housing navigator to search for an apartment, Ronald participated in a Day Habilitation program to obtain independent living skills and learn how to manage his housing and finances as well as self-manage his diabetes.
• With the assistance of his housing navigator, Ronald found an apartment. Before the lease signing, Ronald's housing navigator was able to cover the security deposit through Housing Deposits.
• In July 2023, Ronald moved into his own unit and was referred to Housing Tenancy Sustaining Services, which worked with him on a number of goals, including obtaining Supplemental Security Income benefits.
• Ronald continues to remain connected to care management through the community health center, has remained in his housing, and has not returned to the emergency department since.

Homelessness Is a Driver of Poor Health and Higher Health Care Costs; Housing and Care Management Can Improve Both

Ronald's story puts a face on several points well documented in the research literature:

• Harm: Homelessness contributes to poor health and premature mortality. A national study of the health needs of people experiencing homelessness found that 73% of people experiencing homelessness had at least one unmet health need, 46% had two or more chronic medical comorbidities, and nearly 48% had a history of mental illness.⁴ These unmet health needs  — exacerbated by exposure to harsh conditions, environmental hazards, and interpersonal violence as a result of lacking a stable home — have life-and-death consequences. People experiencing homelessness face a mortality risk 3.5 times higher than people with similar conditions who have housing.⁵ In addition, research shows that homeless adults experience accelerated aging, with premature onset of chronic medical conditions and cognitive and functional impairment.⁶
• Utilization: Homelessness prevents the treatment of health conditions, leading to an overuse of emergency care. Studies have shown how persistent homelessness and the lack of stable housing prevents the effective treatment of chronic health conditions and disease, as well as recovery from behavioral health conditions like mental illnesses and substance use.⁷ Homelessness and lack of stable housing leads to an overuse of emergency and inpatient hospital admissions, as well as high rates of avoidable hospital readmission.⁸ Despite the utilization of acute care services, homeless people report unmet health care needs. For example, although people experiencing homelessness use psychiatric inpatient hospitalizations and substance use treatment services, they fail to recover due the stress and instability encountered while experiencing homelessness.⁹
• Affordability: Homelessness drives higher health costs. Numerous studies show that overreliance on acute and emergency health services among people experiencing homelessness leads to higher health care expenditures. For example, a statewide study in New Jersey found that health care expenditures for people experiencing homelessness were 10% to 27% higher than matched housed counterparts, while another study found that people experiencing homelessness had health care expenditures 2.5 times higher than comparable housed populations.¹⁰

Ronald's story also helps to illustrate that covering targeted interventions that address the housing needs of members experiencing homelessness can improve the effectiveness of health care and treatment, shift utilization patterns toward more appropriate kinds of care, improve health, and lower costs. These impacts have also been well documented through research:

• Interventions that coordinate care management with housing assistance improve treatment outcomes and health outcomes. Numerous studies have found that interventions that combine care management with housing assistance can increase participation in appropriate treatment, improve medication adherence, improve health outcomes, and reduce mortality risk.¹¹
• A Medical respite and recuperative care programs shorten hospital stays and reduce readmissions. A study of medical respite programs found that, by shortening hospital stays and reducing subsequent acute care episodes, these programs could save approximately $2,000–3,000 per hospitalization for a person experiencing homelessness.¹²

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