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Medicaid’s expanding role in addressing homelessness may reshape US policy, Cornell study finds

Heory
Medicaid’s expanding role in addressing homelessness may reshape US policy, Cornell study finds

Medicaid and major health systems are increasingly stepping in to provide housing and services to the homeless, a move that could significantly reshape how the US tackles homelessness, according to new research from Cornell University. The study, which explores the growing involvement of health care in homelessness mitigation, suggests these efforts could either bolster or disrupt existing systems, including those funded by the US Department of Housing and Urban Development (HUD).

The research, led by Charley Willison, assistant professor at Cornell’s College of Veterinary Medicine, documents how nearly one-third of US states, as of August 2023, have introduced Medicaid waivers targeting homelessness. Additionally, more than half of the 100 largest health systems in the country now run programs aimed at supporting homeless populations.

“Health care actors are making significant investments that could prop up the existing homeless policy system, which has an enormous amount of expertise,” Willison said. “But if this trend continues, it could lead to more cuts in HUD funding for housing and homelessness, which would not be helpful.”

Health systems stepping in where local governments struggle

Many health systems report getting involved due to perceived failures by local governments and the Continuum of Care networks—longstanding nonprofit organizations funded by HUD to address homelessness. These systems have faced chronic underfunding, and homelessness, exacerbated by the COVID-19 pandemic, continues to affect millions of Americans annually.

“American cities have been struggling with chronic homelessness for decades,” wrote one health system housing director. “City leaders pledge to eliminate homelessness, but the problem continues to worsen.”

The study, Entrenched Opportunity: Medicaid, Health Systems, and Solutions to Homelessnesspublished on September 27, is the first to document the extent of health systems’ participation in homelessness mitigation efforts. Co-authored by Naquia Unwala, a research associate at Cornell, and Kasia Klasa, a doctoral student at the University of Michigan, the study outlines how health care providers are leveraging Medicaid’s growing role to address housing as a social determinant of health.

Medicaid’s evolving role

Since the passage of the Affordable Care Act in 2010, Medicaid has been seen by some policymakers as a potential “silver bullet” for addressing homelessness, as it is the primary insurer for low-income Americans, including those without stable housing. The Centers for Medicare and Medicaid Services recently allowed states to allocate up to 3% of their Medicaid budgets toward direct housing costs, marking a major shift in how homelessness can be addressed through health care policy.

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

Tensions in governance

The research highlights a growing tension between the traditional Continuum of Care system and the expanding role of health care institutions. While Continuums of Care have long provided services to the homeless, health systems and Medicaid bring significant political power and funding to the table—two factors that may reshape the landscape of US homelessness policy.

“Because US policy is structured around health care institutions, they have the political power to make big changes in social policy,” Willison said. “In the best case, their involvement would raise awareness that boosts HUD funding. But there is also potential for retrenchment.”

Medicaid’s growing involvement in housing could help fill gaps left by local governments and HUD, but it also raises questions about the future role of federal housing programs. As health systems continue to grow in influence, HUD’s role in addressing homelessness may shrink, potentially leaving critical housing needs underfunded.

The study underscores the need for better coordination between health care providers, local governments, and federal housing programs to ensure a cohesive response to homelessness. The researchers suggest that while health care’s involvement is not a perfect solution, it may be the best path forward for addressing the crisis in the short term.