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A Cornell study finds that Medicaid’s growing role in fighting homelessness could change U.S. policy

Heory
A Cornell study finds that Medicaid’s growing role in fighting homelessness could change U.S. policy

New research from Cornell University shows that Medicare and major health care systems are increasingly stepping in to provide housing and services to the homeless, a move that could significantly change how the United States deals with homelessness. The study, which examines health care’s growing involvement in alleviating homelessness, suggests that these efforts could either strengthen or disrupt existing systems, including those funded by the U.S. Department of Housing and Urban Development (HUD).

Led by Charley Willison, an assistant professor at Cornell’s College of Veterinary Medicine, the study documents how, as of August 2023, nearly one-third of U.S. states have implemented Medicaid waivers for homelessness. Additionally, more than half of the nation’s 100 largest health care systems currently have programs to support homeless populations.

“Health care providers are making significant investments that could support the existing homeless policy system, which has a wealth of expertise,” Willison said. “But if this trend continues, it could lead to further cuts in HUD funding for housing and homelessness, which would not be helpful.”

Health systems step in where local governments struggle

Many health systems report involvement due to perceived failures of local governments and the Continuum of Care network, long-standing nonprofit organizations funded by HUD to address homelessness. These systems face chronic underfunding, and homelessness, exacerbated by the Covid-19 pandemic, continues to affect millions of Americans annually.

“American cities have struggled with chronic homelessness for decades,” wrote one health system housing director. “City leaders promise to end homelessness, but the problem continues to worsen.”

test, A solidified opportunity: Medicaid, health care systems, and solutions to homelessnesspublished on September 27, is the first to document the extent to which health systems can participate in efforts to reduce homelessness. The study, co-authored by Naquia Unwala, a research fellow at Cornell, and Kasia Klasa, a doctoral candidate at the University of Michigan, describes how health care providers are leveraging the growing role of Medicaid in addressing housing as a social determinant of health.

The evolving role of Medicaid

Since the passage of the Affordable Care Act in 2010, some policymakers have viewed Medicaid as a potential silver bullet in the fight against homelessness because it is the primary insurer of low-income Americans, including those without permanent housing. The Centers for Medicare and Medicaid Services recently allowed states to allocate up to 3% of their Medicaid budgets to direct housing costs, marking a fundamental shift in the way homelessness is addressed through health care policy.

By 2023, Willison’s research shows, 14 states have adopted Medicaid waivers specifically targeting homelessness, including many of those with the highest rates of homelessness, such as California, New York and Washington. These states are increasingly awarding funding to Medicaid Continuums of Care to implement services, despite the latter’s limited authority and resources.

Management tensions

Research highlights the growing tension between the traditional Continuum of Care system and the growing role of health care institutions. While Continuums of Care has long provided services to the homeless, the health care systems and Medicaid provide significant political power and funding – two factors that could change the landscape of U.S. homelessness policy.

“Because U.S. policy centers around health care institutions, they have the political power to make big changes in social policy,” Willison said. “At best, their involvement would raise awareness, which would increase HUD funding. But there is also potential for cuts.”

Medicaid’s growing involvement in housing may help fill gaps left by local governments and HUD, but it also raises questions about the future role of federal housing programs. As health care system revenues continue to increase, HUD’s role in addressing homelessness may decline, potentially resulting in underfunding of critical housing needs.

The study highlights the need for better coordination between health care providers, local governments and federal housing programs to ensure a consistent response to homelessness. Researchers suggest that while health care involvement is not a perfect solution, it may be the best way to address the crisis in the short term.