CALIF. CONSIDERS USING MEDICAID FUNDS ON HOUSING
At the start of 2022, Thomas Marshall weighed 311 pounds. He had been hospitalized 10 times in five years, including six surgeries. He had an open wound on his left leg that refused to heal — made worse by living in a dirty, moldy house with five other people, two ball pythons, four Chihuahuas and a cage full of rats.
More than a year later, Marshall has lost nearly 100 pounds. His wound has healed. His blood pressure has returned to normal levels. His foot, which had nerve damage, has improved to the point where he goes on regular walks to the park.
Lots of factors are at play in Marshall’s dramatic turnaround, but the one he credits the most is finally having stable housing, after the nonprofit Sacramento Covered helped him get a onebedroom, 500-square-foot apartment in a downtown high-rise. He has hardwood floors, white pine cabinets and a glass jar on the counter filled with Bit-OHoneys.
“To me it’s the most important 500 square feet I’ve ever had,” he said. “Living here has just improved my well-being in every possible way.”
Marshall’s story is part of a radical rethinking of the relationship between housing and health care in the U.S. For decades, Medicaid, the joint state and federal health insurance program for people with disabilities or low incomes, would only pay for medical expenses. But last year the Biden administration gave Arizona and Oregon permission to use Medicaid money for housing — a nod to reams of research showing that people in stable housing are healthier.
Now California wants to join those states, building on the success of programs like the one that got Marshall housing. Gov. Gavin Newsom has proposed spending more than $100 million per year in the state’s Medicaid program to pay for up to six months of housing for people who are or risk becoming homeless; are coming out of prison or foster care; or are at risk for hospitalization or emergency room visits.
It would be the biggest test yet of using Medicaid money for housing. California has the nation’s largest Medicaid program, with more than 13 million patients — or about a third of the state’s population. California also has nearly a third of the nation’s homeless population, according to federal data.
“It’s a huge step toward breaking down the silos that have gotten in the way of taking care of the whole person rather than limb by limb and illness by illness,” said Anthony Wright, executive director of Health Access California, a consumer advocacy group.
It would also be an expensive step. California is expected to have a $22.5 billion budget deficit this year, and it could get bigger in years to come. Meanwhile, the state’s Medicaid spending is projected to increase by $2.5 billion over the next three years, according to the nonpartisan Legislative Analyst’s Office.
“What we’re really doing is expanding the welfare state, which is going to become just a huge financial problem,” said Wayne Winegarden, senior fellow at the Pacific Research Institute, a group that advocates for free-market policies.
California experimented with using Medicaid money for some housing-related expenses in 2016 when it launched a pilot project in 26 counties. While Medicaid did not pay for rent, it paid for things like security deposits and furniture.
Over five years, the program has reduced expensive hospital stays and emergency room visits for people on Medicaid, saving taxpayers an average of $383 per patient per year, according to an analysis by researchers at UCLA.
Now California wants to go further by using Medicaid money to directly pay some people’s rent. Democratic Assemblymember Joaquin Arambula, who chairs the budget subcommittee that will vet Newsom’s proposal, said lawmakers are supportive. Arambula spent a decade as an emergency room doctor.
“I became very good at being able to get cockroaches out of people’s ears,” Arambula said. “The living conditions of many of our communities, especially in our rural communities, really can affect a person’s ability to get adequate sleep, to be prepared for the next day and to stay healthy.”