Abstract

Faced with a difficult economic climate with high levels of unemployment and widespread home foreclosures, the Administration of President Barack Obama has created a unique opportunity to rethink and redirect fundamental policies and practices ranging from health care to regulation of the financial industry. A similar opportunity exists to change Federal homeless assistance policies and programs.

From Introduction

Faced with a difficult economic climate with high levels of unemployment and widespread home foreclosures, the Administration of President Barack Obama has created a unique opportunity to rethink and redirect fundamental policies and practices ranging from health care to regulation of the financial industry. A similar opportunity exists to change Federal homeless assistance policies and programs.

The inclusion of the “Homelessness Prevention and Rapid Rehousing Program” (HPRP), as part of the American Recovery and Reinvestment Act of 2009, signals the Administration‟s willingness to fundamentally change how the United States addresses homelessness. Instead of preserving the status quo of providing assistance to individuals and families only after they have become homeless, the HPRP takes a prevention oriented approach to avert a large influx into homelessness of persons whose once secure jobs and homes are threatened by the economic crisis. There is a great opportunity to build on this shift in how we seek to end homelessness in the United States.

The Administration and the Interagency Council on Homelessness will create a new agenda for programs and a new direction for homeless assistance policy. In this context, there is a need to advance a strong policy stance for cost-effective, permanent supported housing-based solutions for chronically homeless persons whose exit from homelessness is complicated by a severe mental illness, substance abuse disorder or physical disability, and co-occurrences of these conditions. There are strategies to provide cost savings in this endeavor for major Federal agencies, as research shows that chronically homeless persons placed in permanent housing significantly reduce their utilization of health services, which are often reimbursed by Medicaid or the Veteran‟s Administration (VA).

The potential for cost offsets and savings in the U.S. health care system is even more important amidst policymakers‟ efforts to reform the American health care system and contain rapidly increasing health care expenditures. Health care reform legislation passed in March, 2010 will expand Medicaid benefits to cover low-income adults without dependents. Under such an expansion all chronically homeless persons, even those not eligible for Supplemental Security Income (SSI), would become eligible for Medicaid coverage. As a result, Medicaid could be responsible for a greater part of the cost of care for chronically homeless persons, whose medical expenses in many states to date have been uncompensated, or in other states, paid by state medical assistance programs. Given that an expansion of Medicaid coverage will require a greater fiscal commitment on the part of Federal and state authorities, minimizing the utilization of preventable and expensive acute health care services by chronically homeless persons is of vital importance. Due to its demonstrated effectiveness at reducing health care service utilization among chronically homeless persons, an expansion of permanent supported housing and facilitating Medicaid reimbursement for services in supported housing are attractive policy alternatives.

Both health care reform and the presence of a new Administration also offer a unique moment for increased collaboration between agencies, including the Department of Housing and Urban Development (HUD), the Department of Health and Human Services (HHS), and the VA, to design and implement policies and programs that reduce homelessness and enhance the efficient and effective use of resources. Permanent supported housing for chronically homeless persons offers significant potential for better use of health resources and is a natural fit for collaboration among federal partners.

This paper will present the case for policies both to expand the availability of permanent supported housing for chronically homeless persons and establish practices that would make appropriate, needed and effective Medicaid services available for highly selected and targeted populations. After placing the permanent supported housing approach in the context of homeless assistance programs in the United States, we will explain the conceptual underpinnings, program elements and funding mechanisms for permanent supported housing programs. The paper will then review evidence that provides compelling justification for permanent supported housing as a strategy that can realistically end chronic homelessness and generate substantial cost reductions (at the individual client level) and offsets (at an identified population level), if not cost-savings. We will then offer a set of policy objectives that could be pursued with benefits to all concerned that have two primary goals to: 1) increase the availability of permanent supported housing and 2) establish new national policy to provide greater and streamlined access to specific Medicaid funded services for providers of supported housing.