Using Medicaid To Fund State Support Services For Supportive Housing

An OPEN MINDS Market Intelligence Report

This Market Intelligence Report from the OPEN MINDS team discusses how states are funding support services under the permanent supportive housing (PSH) model of care. PSH is an evidence-based model that provides subsidized community-based housing—as well as, services and supports, such as health care, case management, and employee assistance—to very low-income or homeless individuals. Housing and services are not time-limited and are available for as long as needed. The program is based on the idea that access to stable housing positively affects an individual’s health outcomes and lowers expensive health care utilization patterns.

While there are two types of PSH support services—health care and social services—there are no clear definitions to separate the services into categories, and sometimes there is overlap. This overlap has become more prominent in the past five years as Medicaid has expanded to cover additional populations.

With the implementation of Medicaid expansion, most PSH residents are now eligible for Medicaid, and therefore states and provider organizations are trying to use funds from this program to cover as many PSH services as possible. This has sparked debate and confusion: What PSH services will Medicaid cover? CMS has made it very clear that Medicaid will not subsidize or fund housing services (i.e., rent or capital advances to build housing) for beneficiaries. However, Medicaid will cover some PSH services that are typically not considered health care services, including services that can help people to become and remain in stable housing.

This report answers a number of questions related to how states are funding permanent supportive housing services:

1. What is permanent supportive housing?
2. How are services funded under the permanent supportive housing model?
3. What states are using Medicaid to cover support services for housing initiatives?
4. What states have pending Medicaid waiver requests for supportive housing initiatives?
5. What states have had supportive housing Medicaid waiver requests denied by CMS?
6. How can non-housing providers access supportive housing funds?