A ‘game changer?’ Proposed Medicaid benefit would cover housing services

As Virginia barrels toward massive changes to its Medicaid program — from expansion to the proposed work requirements — one new benefit hasn’t gotten quite as much attention as others but could make a big difference for groups that provide housing services.

Tucked into the 1115 demonstration waiver the state needs to launch the work requirements is another change to the program: a new benefit for supportive housing services aimed at some of the state’s most vulnerable residents, from the homeless to people with serious mental illness.

“If it is implemented well and if it is implemented right, this is going to be a way to help sustainably fund the supportive services piece of supportive housing,” said Sim Wimbush, executive director of the Virginia Housing Alliance. “I think it’s a game changer.”

The connection between health and housing — it’s tough to be healthy if you do not have a safe place to sleep — has been well known for years. But historically, housing services and Medicaid programs have been delivered in silos, even though their populations often overlap.

That began to change in 2015, when the federal Centers for Medicare & Medicaid Services issued a bulletin outlining how Medicaid could reimburse for housing services.

Even though many details of the benefit still have to be ironed out, a new funding stream would make a big difference to those in the affordable housing world, according to providers from all over the state.

“Additional funding is needed for housing support,” said Amanda Caughran, lead organizer with Cornerstones, which serves Fairfax County. “There’s not enough affordable housing in Northern Virginia. The gap is just big for our folks. A lot of the time, housing is geared toward 50, 60, 70 percent of the median income in the area. Our folks are making 10, 20, 30 percent of the median income.”

The benefit wouldn’t cover rent or the capital costs of building new housing — which will still remain a massive need, Wimbush said — but it would cover the supportive services that organizations deliver all over the state, which are essentially about keeping the resident in stable housing: from advocating for the tenant to linking them to services like mental health treatment.

Right now, housing providers have to cobble together enough federal, state and local funds, combined with private donations, to pay for those services.

There are still a lot of questions circling the benefit, just as there is still a great deal of uncertainty around the work requirement program. Virginia has to get its proposals approved by the Centers for Medicare & Medicaid Services, which could take up to a year.

The state’s application explains what sort of services would be covered and who would be eligible, but it doesn’t go into detail about how the benefit would be implemented. The program will have an enrollment cap based on available state funding, which has not yet been appropriated, according to the waiver, and it will be rolled out geographically by region.

It’s not clear yet how the benefit will be managed, including whether organizations will have to become direct Medicaid providers or if the money will flow through the managed care organizations, the health plans that contract with the state, to the nonprofit providers.

Allison Bogdanović, executive director of Virginia Supportive Housing, said that the benefit could result in more housing because the dollars that would previously go toward services could be shifted around to cover rent or capital costs.

“I think there’s been sort of a roadblock in more organizations being interested in doing supportive housing because they don’t want to commit to the fundraising that’s required to do the services,” Bogdanović said.

“This is many years down the road until we see how this all evolves, but — between us rebuilding our service programs and working more with partners who are able to reimburse their service costs — it may allow us to scale supportive housing in Virginia to meet the demands.”