States Leverage Medicaid Waivers to Support Housing-Related Interventions

States Leverage Medicaid Waivers to Support Housing-Related Interventions

March 13, 2024

A growing number of states are using new flexibilities in the Medicaid program to address health-related social needs, including housing. 

With approval from the Centers for Medicaid and Medicare Services (CMS), state health officials are piloting and refining interventions to tackle unmet needs and adverse social conditions for some of Medicaid’s most high-risk beneficiaries. As of March 2024, at least 18 states had approved Section 1115 Medicaid demonstration waivers for housing-related services, with eight states recently approved under the housing-related social needs waiver framework. 

State programs cover a variety of strategies, including housing search navigation and one-time community transition costs, tenancy sustaining services, home accessibility modifications, short-term post-hospitalization housing, and medical respite care. North Carolina has one of the nation’s most extensive programs, covering nine housing-related services that address housing navigation and case management, housing quality and safety, and housing cost mitigation. 

Historically, states were prohibited from using Medicaid dollars to cover actual housing costs, known as “room and board.” However, recent federal changes now allow some states to temporarily cover housing costs and utilities for enrollees with specific health and social risk factors, subject to CMS approval. These may include, but are not limited to, individuals who are or are at risk of becoming homeless, individuals with serious mental illness, and individuals at high risk while transitioning from institutional settings. Building on prior state waiver initiatives,  Arizona, Oregon, New York, and Washington are currently approved to cover room and board for designated populations for up to six months. 

While CMS has increasingly approved waivers to address health-related social needs, the agency emphasizes that the Medicaid program must continue to prioritize its core mission of providing access to basic medical services. CMS guidance outlines several conditions for states with approved waivers. Among the requirements, states must not exceed three percent of total annual Medicaid spending for health-related social needs services or infrastructure. States must also meet provider payment rate standards for core Medicaid services. Additionally, Medicaid-funded social services cannot supplant an existing program or funding, and states must maintain or increase pre-waiver spending levels for non-Medicaid social services. States must also complete significant reporting and evaluation requirements. 

As CMS continues to approve waivers for health-related social needs, states have an opportunity to experiment with housing-focused interventions. Although Medicaid alone cannot provide a long-term solution for keeping beneficiaries stably housed, initiatives that address housing can potentially benefit some individuals with significant health and social needs. These state initiatives can also help build evidence about the impacts of Medicaid-funded social interventions on health outcomes and healthcare costs.

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