California looks to spend some Medicaid money on housing

SACRAMENTO, Calif. – Thomas Marshall weighed 311 pounds when 2022 began. He had undergone six surgeries and 10 hospital stays over the course of five years. He was living in a filthy, moldy home with five other people, two ball pythons, four Chihuahuas, and a cage full of rats when he developed an open cut on his left leg that would not heal.

After more than a year, Marshall has shed about 100 pounds. His injury has recovered. His blood pressure has stabilized once more. His nerve-damaged foot has mended to the point where he can now regularly go to the park.

There are several reasons that contributed to Marshall’s rapid turnaround, but the one he values most is having stable housing when Sacramento Covered helped him secure a 500 square foot (46.4 square meter), one-bedroom apartment in a downtown high rise. He has white pine cabinetry, hardwood floors, and a glass jar containing Bit-O-Honeys on the counter.

He declared, “To me, it’s the most significant 500 square feet I’ve ever had.” Living here has already enhanced my wellbeing in every way.

The narrative of Marshall is a component of a dramatic reevaluation of how housing and healthcare are related in the United States. Medicaid, a state-federal health insurance program for low-income individuals or those with disabilities, used to exclusively cover medical costs. Yet, the Biden administration allowed Oregon and Arizona to use Medicaid funds for housing last year in recognition of the mountains of data demonstrating the health benefits of stable housing.

Building on the success of programs like the one that secured housing for the Marshall family, California now wants to join similar states. Gavin Newsom, the governor, has proposed allocating more than $100 million annually from the state’s Medicaid program to cover up to six months of housing for those who are or may soon become homeless, are leaving custody of their parents or guardians, are at risk of hospitalization, or who may need to visit the emergency room.

The use of Medicaid funds for housing would face its toughest challenge to yet. More than 13 million patients, or roughly a third of the state’s population, are enrolled in California’s Medicaid program, which is the largest in the country. Federal statistics show that over a third of the country’s homeless people reside in California.

Anthony Wright, executive director of the consumer advocacy group Health Access California, called it “a big step toward tearing down the silos that have gotten in the way of taking care of the complete person instead of limb by limb and disease by illness.”

Furthermore, it would be a costly move. This year, California is anticipated to have a $22.5 billion budget deficit, and future years may see it increase. According to the independent Legislative Analyst’s Office, the state’s Medicaid spending is anticipated to rise by $2.5 billion during the following three years.

What we’re actually doing, according to Wayne Winegarden, senior fellow at the Pacific Research Institute, a proponent of free-market principles, is “growing the welfare state, which is just going to become a massive financial catastrophe.”

In 2016, California began a pilot study in 26 counties to test out using Medicaid funds for some housing-related expenses. While Medicaid did not cover rent, it did cover items like furniture and security deposits.

In Marshall’s situation, he uses some of the $1,153 he receives each month from Social Security and Supplemental Security Income to cover his rent. But his security deposit, bed, sofa, table, chairs, and about 3 1/2 gallons of Pine Sol were all covered by Medicaid. Marshall claimed that keeping his flat tidy was one factor in the eventual healing of his leg wound.

According to a UCLA study, the program has reduced expensive hospital stays and ER visits for Medicaid patients over the course of five years, saving the tax payers an average of $383 per patient each year.

California now wants to take things a step further by paying some people’s rent directly with Medicaid funds. The budget subcommittee’s chairman, Democratic Assemblymember Joaquin Arambula, said members are in favor of Newsom’s proposal. Arambula worked as an ER physician for ten years.

Arambula remarked, “I grew extremely proficient at being able to remove cockroaches out of people’s ears. “Many of our areas, especially the rural ones, have living conditions that can seriously impair a person’s capacity for getting enough rest, preparing for the next day, and maintaining good health.”

Advocates for the homeless say that while they support these programs, increasing rent costs alone won’t solve the state’s severe affordable housing problem.

According to Kelly Bennett, president and CEO of Sacramento Covered, it frequently took up to eight months for staff to place a patient in an apartment during California’s initial experiment with using Medicaid funds for housing services. People have occasionally waited years to discover a spot.

Bennett said it’s “still very, very difficult to find properties — and to find units where the landlords will lease to our clients” even when one has the deposit money and some rental assistance.

Marshall claimed to have grown up in Sacramento and to have studied culinary arts and dietetic technology. Yet from the late 1990s to around 2006, he lived on the streets due to a 30-year meth addiction. He spent his nights in an abandoned dump, frequently consuming leftovers from adjacent park picnics.

He put his name on the waiting list for apartments at many buildings with government assistance, but he was never accepted. He applied for his present flat for approximately a year, which he now rents for $186 per month with the aid of a subsidy.

The 64-year-old Marshall said, “I feel like I’m electric…. I have power and the ability to accomplish things that I could not do for a very long time. “I’m going to spend the years I have left up here in the glass tower,” he said.