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States are plowing billions of dollars into a high-stakes health care experiment thats exploding around the country: using scarce public health insurance money to provide housing for the poorest and sickest Americans.

This story also ran on CNN. It can be republished for free.

California is going the biggest, pumping $12 billion into an ambitious Medicaid initiative largely to help homeless patients find housing, pay for it, and avoid eviction. Arizona is allocating $550 million in Medicaid funding primarily to cover six months of rent for homeless people. Oregon is spending more than $1 billion on services such as emergency rental assistance for patients facing homelessness. Even ruby-red Arkansas will dedicate nearly $100 million partly to house its neediest.

At least 19 states are directing money from Medicaid the state-federal health insurance program for low-income people into housing aid and addressing the nations growing homelessness epidemic, according to the Centers for Medicare & Medicaid Services. Even though theres little agreement that this will provide a long-term fix for vulnerable patients health or housing, the Biden administration is encouraging other states to jump in. Several are in the pipeline, including Tennessee, West Virginia, and Montana and New York got the green light from the federal government in January.

Using health care funding to house people is a big philosophical debate, said Alex Demyan, assistant director of Arizonas Medicaid agency. We know health care cant solve all the problems, but we also know that housing agencies are maxed out and we have enormous need to help stabilize people.

Homelessness jumped 12% in the U.S. last year, to an estimated 653,104 Americans, the highest level on record, even as the nation dramatically increased its inventory of permanent housing and temporary shelter beds.

As people languish on the streets, often struggling with addiction, severe mental illness, and untreated chronic diseases, health care officials and political leaders are turning to health insurance money for relief. They argue that housing aid will improve health and save taxpayer money by keeping people out of institutions such as nursing homes, hospitals, and jails.

But evidence supporting this argument is mixed.

For instance, in a trial by researchers at the University of California-San Francisco, homeless people in Santa Clara County, California, who were randomly assigned to receive long-term housing and services used the psychiatric emergency department 38% less than a control group over four years while increasing their use of routine mental health care. But participants were still hospitalized at high rates and continued to rely on the emergency room for routine medical care or rest.

State Medicaid programs have long dabbled in housing, but with the blessing and encouragement of the Biden administration, they are launching more services for more people with heaps of new state and federal money. The trend is part of a broader White House strategy that encourages Medicaid directors to offer social services alongside traditional medical care, with the goal of making their residents healthier.

A health care dollar can do more than just pay for a doctor visit or hospital stay, Xavier Becerra, secretary of the U.S. Department of Health and Human Services, told KFF Health News. We should be using the federal health care dollar for wellness care: Get them before they get ill, and keep them healthy. Is there anyone who would deny that someone who is homeless is going to have a harder time also keeping their health up than someone who is housed with running water and heat?

Becerra acknowledged these initiatives as experiments. But he said the federal government can no longer ignore the rampant death and disease that is plaguing homeless populations around the U.S.

Were simply saying, State, if you can prove to us that with this Medicaid dollar you will improve someones health or health outcome, then you have essentially served the purpose of the Medicaid program and youre saving taxpayers more money, he said.

But not all health care leaders or even homelessness experts believe this is the best use of Medicaid money, especially by a safety-net program that faces routine criticism for failing to provide basic health care to many enrollees.

If youre on Medicaid, you often have to wait months and months for a specialty visit, even if its a life-threatening concern, so I worry about what people wont be able to get because of this, said Margot Kushel, a leading homelessness researcher and primary care doctor at Zuckerberg San Francisco General Hospital and Trauma Center who primarily treats low-income patients.

Its not that I dont want the money to be spent, but is it best spent in health care? she asked. It’s much better than nothing, but it’s far from providing the long-term housing and stability that people really need.

Kushel said the danger is that most Medicaid housing assistance can be used only once or is time-limited, such as rental payments, which typically end after six months.

By the time folks get into housing, theyre already really, really sick, she said. What happens at the end of six months when rental assistance like free rent runs out? Email Sign-Up

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Housing as Health Care

Across the country, state Medicaid programs are stretching the definition of health care and getting into the business of social services, delivering a range of nontraditional benefits such as healthy home-delivered meals for patients with diabetes and air filters for patients with asthma.

While the federal government historically has banned the use of Medicaid money for direct rent payments, that has changed.

In 2022, Arizona received federal approval for an initiative called H2O, which will prioritize homeless people and those at risk of losing housing who also have a mental health condition and chronic illness. When it launches in October, it will primarily provide two services: rent payments for up to six months; and transitional housing, which can include shelters with intensive services.

Arizona saw a 5% jump in homelessness in 2023 from the previous year. Its program will supplement a separate state-funded Medicaid initiative that provides 3,000 rent vouchers for people in southern Arizona who have a severe mental illness and are homeless or at risk of becoming homeless. About 5,000 people are on the waiting list for a voucher.

Weve seen such positive health outcomes and cost reductions as a result, so it made total sense to us to expand our work in that space, Demyan said. That program slashed ER visits 45% and reduced hospital inpatient admissions 53% at the six-month mark after patients started receiving services, while increasing less costly preventive care 56% and saving $4,300 per member, per month, according to state data.

California, home to nearly 30% of the nations homeless population, saw a nearly 6% jump in homelessness in 2023, to about 181,000 people.

The state launched its massive CalAIM initiative in 2022 to offer a wide variety of social services to a small sliver of the states roughly 15 million Medicaid enrollees. A large share of the resources are going to housing services for homeless people or those facing eviction, such as covering security deposits and enlisting case managers to hunt for available apartments. State leaders are also asking the Biden administration for permission to provide six months of rent.

If youre saddled with a great deal of either physical or behavioral health conditions, whether its diabetes or HIV, high blood pressure or schizophrenia, without housing, its really hard to stabilize those conditions, said Mark Ghaly, secretary of the California Health and Human Services Agency.

But he cautioned that Medicaids core focus must remain getting people healthy, even if theyre living outside, which is a monumental and expesive challenge because conditions like diabetes, heart disease, and HIV require continuous treatment and often multiple medications.

I do not think that health care is responsible for solving homelessness in California or anywhere else, Ghaly said. But if housing instability or lack of housing is one of the key drivers getting in the way of being healthy, then absolutely we need to pay attention to it.

Health insurers that provide Medicaid coverage in California can choose whether to provide housing services, but Oregon is requiring Medicaid insurers to do so.

Homelessness grew 12% in Oregon from 2022 to 2023, but the state is targeting patients at risk of becoming homeless. Participants will be eligible for six months of rent and other services when the program launches in November, said Dave Baden, deputy director of the Oregon Health Authority.

Were really trying to focus on people teetering on the brink, Baden said. If youre already homeless, you really need longer, sustainable housing dollars to keep that person housed.

Its not just states experimenting with this approach. Kaiser Permanente is one of the health systems that has invested its own funds into housing. In recent years, the health care giant has committed hundreds of millions of dollars to help maintain or build thousands of affordable housing units, in addition to providing housing-related Medicaid benefits for its members.

We have to do something. The crisis is out of control, said Bechara Choucair, its chief health officer. Are you covered by Medi-Cal?

We want to hear about your experiences and, with your permission, may incorporate your story into our coverage. Please tell us what it has been like for you as you have sought and received care, including the good and the bad, the obstacles and the successes.Share Your Story

Mission Creep

Sherry Glied, a professor at New York University and former Obama administration official who is an expert in health care economics, warned in a recent health policy analysis of mission creep in health care. She cautioned that health care institutions getting into the business of social services could be a dangerous distraction.

Glied pointed to at least 57 health systems and 917 hospitals around the country that have launched social service initiatives, with most focusing on housing. Because many institutions struggle to meet patient safety and quality care standards, Glied argued that they should instead improve basic care and leave housing to social service organizations that specialize in this work.

Providing people with food or housing is pretty far removed from the core mission of health care, she told KFF Health News.

Peter Lee, another former Obama administration official and the founding executive director of Californias Obamacare exchange, said health care providers should consider offering some housing and social services, but he fears such initiatives may divert money from traditional medicine and prevent patients from getting adequate care.

In the past five to 10 years, there has been a lot of recognition that health is about much more than actual health care. Very true, Lee said. The question is how do you address those issues while health care itself is not doing too great. The brass tacks of this is making sure people with diabetes have great diabetes care, that people get checkups in time, that people can get the regular health care they need.

State Medicaid programs, which provide care to at least 80 million Americans, often struggle to deliver basic medical services, such as childhood dental visits and breast cancer screenings. In California, the state spending the most on housing services, children on Medicaid did not have timely access to care for mental health or substance use in 2022, according to an audit published in November.

Despite these shortfalls, most of the states that have been given the federal go-ahead to experiment with housing services have secured funding for five years. California is among the states that hope to make the benefits permanent.

Though a Republican presidency could interrupt this trend, states say theyre committed even if their initiatives dont pass a traditional cost-benefit analysis.

The singular focus on a financial return on investment is not as clear as it was previously, said Cindy Mann, a federal Medicaid director under Obama.

States are just seeing how little sense it makes to treat people and then release them back to the streets without the support they need.

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

Angela Hart: ahart@kff.org, @ahartreports Related Topics California Health Industry Insurance Medi-Cal Medicaid Public Health Arizona Arkansas California Legislature Homeless Legislation Montana Oregon Tennessee West Virginia Contact Us Submit a Story Tip

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Ex-Tory chairman Sir Jake Berry defects to Reform

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Ex-Tory chairman Sir Jake Berry defects to Reform

Ex-Tory chairman Sir Jake Berry has defected to Reform, in the latest blow to the Conservatives.

The former MP for Rossendale and Darwen, who served as Northern Powerhouse minister under Boris Johnson and lost his seat last year, said he had defected to Nigel Farage’s party because the Tories had “lost their way”.

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Reform UK confirmed the defection to Sky News, which was first broken by The Sun.

Speaking to the paper, Sir Jake said Mr Farage’s party was the “last chance to pull Britain back from terminal decline”.

“Our streets are completely lawless,” he said.

“Migration is out of control. Taxes are going through the roof.

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“And day after day, I hear from people in my community and beyond who say the same thing: ‘This isn’t the Britain I grew up in’.”

Sir Jake accused his former party of “abandoning the British people” but said he was not “giving up”.

“I’m staying. And I’m fighting.

“Fighting for the Britain I want my kids, and one day, my grandkids, to grow up in.”

Mr Farage welcomed what he said was “a very brave decision” by Sir Jake.

“His admission that the Conservative government he was part of broke the country is unprecedented and principled,” he added.

A Conservative Party spokesman said: “Reform support increasing the benefits bill by removing the two-child cap, and nationalising British industry. By contrast the Conservatives, under new leadership, will keep making the case for sound money, lower taxes and bringing the welfare bill under control.

“We wish Jake well in his new high spend, high tax party.”

Sir Jake’s defection to Reform comes just days after former Conservative cabinet minister David Jones joined Reform UK, which continues to lead in the polls.

European Research Group (ERG) chair Mark Francois (left), and deputy chair David Jones, speak to the media outside Portcullis House, Westminster
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Former Welsh secretary David Jones (R) alongside Tory MP Mark Francois. Pic: PA

Mr Jones, who was MP for Clwyd West from 2005 until standing down in 2024, said he had quit the Tories after “more than 50 years of continuous membership”.

Sir Jake was the MP Rossendale and Darwen in Lancashire between 2010 and 2024, when he was defeated by Labour’s Andy MacNae.

He held several ministerial posts including in the Department for Housing, Communities and Local Government, Energy and Climate Change and the Cabinet Office.

Nigel Farage holds up six fingers to indicate the six votes his party's candidate won by in the Runcorn and Helsby by-election.
Pic: Reuters
Image:
Nigel Farage after winning the Runcorn and Helsby by-election.
Pic: Reuters

He was also chairman of the Conservative Party from September to October 2022, under Liz Truss.

Announcing his defection – which comes a year after the Tories suffered their worst ever election defeat – Sir Jake said “Britain was broken” and “the Conservative governments I was part of share the blame”.

“We now have a tax system that punishes hard work and ambition,” he said.

“Just this week, we saw record numbers of our brightest and best people leaving Britain because they can’t see a future here. At the same time, our benefits system is pulling in the world’s poor with no plan for integration and no control over who comes in.

“If you were deliberately trying to wreck the country, you’d be hard-pressed to do a better job than the last two decades of Labour and Tory rule.

“Millions of people, just like me, want a country they can be proud of again. The only way we get that is with Reform in government. That’s why I’ve resigned from the Conservative Party. I’m now backing Reform UK and working to make them the next party of government.”

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He added: “And with Nigel Farage leading Reform, we’ve got someone the country can actually trust. He doesn’t change his views to fit the mood of the day. And people respect that. So do I. That’s why I believe he should be our next prime minister.”

A Labour Party spokesperson said: “Not content with taking advice from Liz Truss, Nigel Farage has now tempted her Tory Party chairman into his ranks.

“It’s clear Farage wants Liz Truss’s reckless economics, which crashed our economy and sent mortgages spiralling, to be Reform’s blueprint for Britain. It’s a recipe for disaster and working people would be left paying the price.”

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Starmer and Macron agree need for ‘new deterrent’ to stop small boat crossings

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Starmer and Macron agree need for 'new deterrent' to stop small boat crossings

Sir Keir Starmer and Emmanuel Macron have agreed the need for a “new deterrent” to deter small boats crossings in the Channel, Downing Street has said.

The prime minister met Mr Macron this afternoon as part of the French president’s state visit to the UK, which began on Tuesday.

High up the agenda for the two leaders is the need to tackle small boat crossings in the Channel, which Mr Macron said yesterday was a “burden” for both the UK and France.

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The small boats crisis is a pressing issue for the prime minister, given that more than 20,000 migrants crossed the English Channel to the UK in the first six months of this year – a rise of almost 50% on the number crossing in 2024.

Sir Keir is hoping he can reach a deal for a one-in one-out return treaty with France, ahead of the UK-France summit on Thursday, which will involve ministerial teams from both nations.

The deal would see those crossing the Channel illegally sent back to France in exchange for Britain taking in any asylum seeker with a family connection in the UK.

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However, it is understood the deal is still in the balance, with some EU countries unhappy about France and the UK agreeing on a bilateral deal.

French newspaper Le Monde reports that up to 50 small boat migrants could be sent back to France each week, starting from August, as part of an agreement between Sir Keir and Mr Macron.

A statement from Downing Street said: “The prime minister met the French President Emmanuel Macron in Downing Street this afternoon.

“They reflected on the state visit of the president so far, agreeing that it had been an important representation of the deep ties between our two countries.

“Moving on to discuss joint working, they shared their desire to deepen our partnership further – from joint leadership in support of Ukraine to strengthening our defence collaboration and increasing bilateral trade and investment.”

It added: “The leaders agreed tackling the threat of irregular migration and small boat crossings is a shared priority that requires shared solutions.

“The prime minister spoke of his government’s toughening of the system in the past year to ensure rules are respected and enforced, including a massive surge in illegal working arrests to end the false promise of jobs that are used to sell spaces on boats.

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“The two leaders agreed on the need to go further and make progress on new and innovative solutions, including a new deterrent to break the business model of these gangs.”

Chris Philp, the shadow home secretary, seized on the statement to criticise Labour for scrapping the Conservatives’ Rwanda plan, which the Tories claim would have sent asylum seekers “entering the UK illegally” to Rwanda.

He said in an online post: “We had a deterrent ready to go, where every single illegal immigrant arriving over the Channel would be sent to Rwanda.

“But Starmer cancelled this before it had a chance to start.

“Now, a year later, he’s realised he made a massive mistake. That’s why numbers have surged and this year so far has been the worst in history for illegal channel crossings.

“Starmer is weak and incompetent and he’s lost control of our borders.”

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Controversial welfare bill passes final Commons stage – but only after another concession

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Controversial welfare bill passes final Commons stage - but only after another concession

Sir Keir Starmer’s watered down welfare bill has passed its final stage in the Commons, after another concession was made to MPs.

The Universal Credit and Personal Independence Payments Bill passed by 336 votes to 242 on Wednesday night – a majority of 94.

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In a bid to thwart further opposition to the bill following last week’s climbdown, the government said it would not try to introduce any more reforms to personal independence payments (PIP) until a review by work and pensions minister Sir Stephen Timms on the assessment process has concluded.

Sir Stephen said he wanted to finish his review by next autumn, but that the government would not agree to complete the review in 12 months as some MPs wanted.

Marie Tidball, the Labour MP who had called for the 12-month limit, later signalled she was happy with the government’s compromise.

Ministers also agreed to her calls to have a majority of the taskforce looking at PIP to be disabled or from disability organisations, and for the outcome of the review to come before any PIP changes. It will also be voted on by MPs.

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A total of 47 Labour MPs have rebelled against the government to vote against its welfare reforms.

Mother of the House Diane Abbott, former minister Dawn Butler, Andy McDonald, Stella Creasy and Jonathan Brash were among those in the “no” lobby.

Meanwhile, MPs rejected a separate amendment by Green MP Sian Berry, which called for the basic rate of universal credit to increase by 4.8% above inflation each year until 2030.

A total of 39 Labour MPs voted for scrapping the clauses that halved Universal Credit for new claimants – the only major cut left in the bill after the government made its concessions.

The passing of the bill will come as a relief to Sir Keir Starmer, who last week was forced into a humiliating climbdown over his flagship welfare package in the face of significant opposition from his own MPs.

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Prior to the vote last Tuesday, the government offered significant concessions including exempting existing personal independence payment claimants (PIP) from stricter new criteria and only freezing and cutting the universal credit health top-up for new applications.

As the vote last week unfolded, it offered further confessions amid concerns the bill could be voted down – notably, that changes in eligibility for PIP would not take place until a review he is carrying out into the benefit is published in autumn 2026.

They ended up voting for only one part of the plan: a cut to Universal Credit (UC) sickness benefits for new claimants from £97 a week to £50 from 2026/7.

A total of 49 Labour MPs voted against the bill – the largest rebellion in a prime minister’s first year in office since 47 MPs voted against Tony Blair’s Lone Parent benefit in 1997, according to Professor Phil Cowley from Queen Mary University.

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