Housing as Health Care? Illinois Proposes Medicaid Expansion

Illinois Governor Pat Quinn’s Medicaid waiver proposal includes a program that may seem unrelated to health care: supportive housing with subsidized rent and social assistance. The “housing is health care” movement began decades ago, when organizations began discovering the links between housing, health care, and residential support services. Trial projects in New York City, Boston, Chicago, and other large cities provided evidence that stable housing can significantly improve health outcomes for chronically homeless individuals. Homelessness is associated with high rates of unmet health needs, including untreated chronic illness and high rates of mortality.

The Health Problems of the Homeless

The health problems associated with homelessness often put a large burden on the health care system, which many studies show can be reduced by providing housing stability. A Chicago test that combined housing for chronically homeless patients with intensive case management services not only improved housing stability, but reduced hospital visits. Dr. Stefan Kertesz, a researcher on homelessness at the University of Alabama at Birmingham, explains that “once housing programs start, the ability to obtain major savings in the hospitals and jails depends in part on having targeted resources to the most vulnerable. A lot of them will be people who are making a sad and avoidable circuit between institutions and the streets.” Programs like the Chicago test form the basis of Quinn’s proposal to include supportive housing in the state’s Medicaid program.

In general, federal rules do not allow states to use federal Medicaid money to build housing or pay rent. However, states can submit waiver proposals to CMS’ Innovation Center to try new approaches, which is how Quinn plans to attempt the program. Illinois Deputy Governor Cristal Thomas, who is leading the initiative, said, “The ability to stabilize people in housing is very important. We view it as critical to the success of our efforts.” The plan, which will be posted online on February 7, suggests ways that insurance companies with Medicaid contracts would be eligible to receive financial bonuses for providing homeless and institutionalized patients with housing and support teams. Illinois will receive public feedback on the proposal for 30 days, and plans to submit the proposal to federal Medicaid officials on March 10.

The Waiver Proposal

To oversee the waiver proposal, as well as lead and coordinate the implementation of the program, support collaborative efforts to improve Illinois’s health care delivery system, and signal the importance of such innovations, Quinn recently used an executive order to create the Office of Health Innovation and Transformation. In its description of the proposed program, Illinois seeks to expand and transform its Medicaid program to consolidate nine different programs that currently serve distinct categories of disabled people. The proposed program description is 78 pages long; the actual proposal will be much longer as the governor’s office fleshes out its plans. For now, it is difficult to assess whether the proposal will be successful because the necessary scope and complexity of the program has not been clearly stated. If approved, the program would bring in $3.2 billion in new federal funds over five years to Illinois’s $17.8 billion Medicaid program.