California Looks to Spend Some Medicaid Money on Housing

At the start of 2022, Thomas Marshall weighed 311 pounds. He had been hospitalized 10 times in five years, including six surgeries. He had an open wound on his left leg that refused to heal — made worse by living in a dirty, moldy house with five other people, two ball pythons, four Chihuahuas and a cage full of rats.

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More than a year later, Marshall has lost nearly 100 pounds. His wound has healed. His blood pressure has returned to normal levels. His foot, which had nerve damage, has improved to the point he goes on regular walks to the park.

Lots of factors are at play in Marshall’s dramatic turnaround, but the one he credits the most is finally having stable housing, after the nonprofit Sacramento Covered helped him get a one-bedroom, 500 square-foot (46.4-square-meter) apartment in a downtown high rise. He has hardwood floors, white pine cabinets and a glass jar on the counter filled with Bit-O-Honeys.

“To me it’s the most important 500 square feet I’ve ever had,” he said. “Living here has just improved my well-being in every possible way.”

Marshall’s story is part of a radical rethinking of the relationship between housing and health care in the U.S. For decades, Medicaid, the joint state and federal health insurance program for people with disabilities or low incomes, would only pay for medical expenses. But last year the Biden administration gave Arizona and Oregon permission to use Medicaid money for housing — a nod to reams of research showing people in stable housing are healthier.

Now California wants to join those states, building on the success of programs like the one that got Marshall housing. Gov. Gavin Newsom has proposed spending more than $100 million per year in the state’s Medicaid program to pay for up to six months of housing for people who are or risk becoming homeless; are coming out of prison or foster care; or are at risk for hospitalization or emergency room visits.

It would be the biggest test yet of using Medicaid money for housing. California has the nation’s largest Medicaid program, with more than 13 million patients — or about a third of the state’s population. California also has nearly a third of the nation’s homeless population, according to federal data.

“It’s a huge step toward breaking down the silos that have gotten in the way of taking care of the whole person rather than limb by limb and illness by illness,” said Anthony Wright, executive director of Health Access California, a consumer advocacy group.

It would also be an expensive step. California is expected to have a $22.5 billion budget deficit this year, and it could get bigger in years to come. Meanwhile the state’s Medicaid spending is projected to increase by $2.5 billion over the next three years, according to the nonpartisan Legislative Analyst’s Office.

“What we’re really doing is expanding the welfare state, which is going to become just a huge financial problem,” said Wayne Winegarden, senior fellow at the Pacific Research Institute, a group that advocates for free-market policies.

California experimented with using Medicaid money for some housing-related expenses in 2016 when it launched a pilot project in 26 counties. While Medicaid did not pay for rent, it paid for things like security deposits and furniture.

In Marshall’s case, he pays his own rent, using some of the $1,153 per month he gets from Social Security and Supplemental Security Income. But Medicaid paid for his security deposit, bed, sofa, table, chairs and nearly 3 1/2 gallons of Pine Sol. Marshall said keeping his apartment clean is one thing that helped his leg wound to finally heal.

Over five years the program has reduced expensive hospital stays and emergency room visits for people on Medicaid, saving taxpayers an average of $383 per patient per year, according to an analysis by researchers at UCLA.

Now California wants to go further by using Medicaid money to directly pay some people’s rent. Democratic Assemblymember Joaquin Arambula, who chairs the budget subcommittee that will vet Newsom’s proposal, said lawmakers are supportive. Arambula spent a decade as an emergency room doctor.

“I became very good at being able to get cockroaches out of people’s ears,” Arambula said. “The living conditions of many of our communities, especially in our rural communities, really can affect a person’s ability to get adequate sleep, to be prepared for the next day and to stay healthy.”

Advocates for homeless people say they welcome such programs but spending more money on rent isn’t enough, noting the state still has a massive shortage of affordable housing.

Kelly Bennett, founder and CEO of Sacramento Covered, said that during California’s first experiment with using Medicaid money for housing services, it would often take up to eight months for workers to place a patient in an apartment. In some cases, people have waited for years to find a place.

“Even when you have the deposit money and you have some rental subsidy, it’s still very, very challenging to find units — and to find units where the landlords will lease to our clients,” Bennett said.

Marshall said he grew up in Sacramento and got a degree in dietic technology and culinary arts. But a 30-year addiction to meth landed him on the streets from the late 1990s through about 2006. He camped at an old landfill, often eating leftovers from people’s picnics at a nearby park.

Click here to read the full article in AP News

Comments

  1. “Advocates for homeless people say they welcome such programs but spending more money on rent isn’t enough, noting the state still has a massive shortage of affordable housing.”

    It’s NEVER ENOUGH for people getting handouts.

    Cockroaches in peoples ears? Give me a break. Exactly how many times did that happen?

    When are California voters going to have enough?

  2. Having emigrated from the Gulf Coast into California in the early 60s, one blessing I always counted was NO cockroaches.

    Maybe they arrived here in the bums’ ears? The roaches must have been juveniles to fit into an ear. I also cannot picture mama roach maneuvering herself to deposit her egg case in an ear. But who am I to doubt this story? Maybe the ERs he served in were not n California?

    A degree in dietic technology and no funds for rent somehow does not add up to 311 pounds.
    My few encounters with meth heads argues emaciation.

    I really can use that $383 this year! So glad the Government was there to help THAT much!

    The shortage of affordable housing also means an oversupply of bums invited to live on public property.

  3. Intriguing opportunity for compassion if this situation is common enough. But I highly doubt Arambula’s experience is common enough to develop ANOTHER bloated department that will receive tax dollars for decades on end. I see another opportunity for abused uses of tax payer dollars. Gov’t just doesn’t work on efficient business sense because it is too easy to spend other people’s money with no accountability and no swift plans to cut wasteful spending.

  4. Marcy Berry says

    This article borders on the surreal. A 300-pound meth addict would be an anomaly indeed. A state experiencing a budgetary deficit wanting to spend even more on free housing comes across as delusional. A Presidency wanting to print even more fiat money (how else are they going to fund even more “programs”?) comes close to desperation. Oh wait — delusion appears to permeate progressive thinking. Nothing unusual here, then.

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