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By Athena Mandros

I recently received a great reader question – “I know there has been a lot of talk about who is covering what services under permanent supportive housing initiatives, but can you explain exactly what permanent supportive housing is and how these services are funded?”

Permanent supportive housing (PSH) is an evidence-based model that provides subsidized community-based housing, as well as services and supports like health care, case management, and employment assistance to very low-income or homeless individuals. Housing is “permanent” because there is no time limit on how long housing can be utilized. In most programs, whether or not a resident chooses to access services and supports is not a condition of housing.

It is easy to confuse PSH with other housing models and delivery systems that provide living facilities to consumers, however there are key differences. For example, housing models such as shelter and transitional housing are meant to be time-limited, and after they end an individual becomes responsible for managing their housing. PSH also differs from housing in residential and institutional care because it meets the Centers for Medicaid and Medicare (CMS) definition of a setting where home- and community-based services may be provided (see Why Do States Need Home- & Community-Based Services Waivers?). Additionally, individuals who reside in permanent supportive housing have leases and tenant protections as allowed under the law. They may come and go whenever they wish, have a full service dwelling (including bathroom, kitchen, and lockable door), and may host visitors.

Why is PSH so important? Housing is a major social determinant of health (see Improving Population Health Management With Public Health Approaches, Public Health = Population Health, and The Social Service Factor In The Health Care Value Equation. Because of this and Medicaid expansion, which makes covering services for consumers in PSH easier, many service provider organizations are considering expanding their housing programs as a complement to their population health management initiatives. But there is one major challenge to implementing these services: Permanent supportive housing is a model – not a program. Therefore, there is not a single federal PSH funding stream. This has resulted in at least three different agencies, funding the three components of the model:

  1. Housing – The U.S. Department of Housing and Urban Development (HUD) provides funding for rental assistance, construction loans, and rehabilitation.
  2. Health Care – The Centers for Medicaid and Medicare (CMS) provides funding for Medicaid and/or Medicare services. Individuals who are not eligible for Medicaid or Medicare (or other health insurance programs) receive health care services from safety net provider organizations. (More on this in upcoming briefings).
  3. Social Services– State programs and non-profit organizations provide funding for any other services that might be needed such as additional case management, employment assistance, or food.

Additionally, because there is no single PSH grant stream, providers must choose one of three major HUD programs that provide PSH based on the needs of the consumer population they wish to serve:

  1. Section 811 Housing – Provides supportive housing services to very-low income individuals who require home- and community-based services. Under the Olmstead Act, no more than 20% of a multi-family dwelling unit can be designated as PSH for individuals with disabilities.
  2. Section 202 Housing – Provides supportive housing services to individuals who are over the age of 62. There has been a recent push to target elderly individuals who require home- and community-based services and are at-risk for nursing facility level of care.
  3. Continuum of Care Program (CoC) – Provides supportive housing to individuals who are chronically homeless. The CoC program is the only program that allows services to be a requirement of housing, however, services for a disability are not allowed to be a condition of housing. The CoC is by far the largest program of the three providing almost triple the amount of units.

For more information on specific contracting requirements, program budgets, and details on how funding is distributed, check out How Are Permanent Supportive Housing Initiatives Funded? An OPEN MINDS Market Intelligence Report. This report is free to all premium members – and can be purchased in our e-store for $495. This report answers a number of questions:

  1. What is Permanent Supportive Housing (PSH)?
  2. What is the difference between federal HUD-supported PSH programs?
  3. What is Section 811 Housing and how is it funded?
  4. What is Section 202 and how is it funded?
  5. What is the Continuum of Care (CoC) program and how is it funded?

And for even more, check out the session, Housing & Health Care: Emerging Models To Provide Housing & Treatment Services For Complex Consumers, at the 2015 OPEN MINDS Strategy & Innovation Institute, where Luke Crabtree, Chief Executive Officer, Project Transition; Cal Hedigan, Deputy CEO, Community Access; Alysia Pascaris, Deputy CEO, Community Access; and Jeff Kirschner, MHSA, Executive Vice President, Greater Cincinnati Behavioral Health Services; will discuss their housing programs.


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