Improving Health through Housing: Three Tips For State Policymakers
State and federal policymakers increasingly acknowledge that health is difficult to achieve and maintain for people without a stable home. Numerous studies show that housing and housing supports can help vulnerable populations improve and maintain health while lowering hospital and other costs for state and local governments. Addressing health and housing can also further state and federal efforts to reduce health disparities. Providers of affordable housing can also benefit from healthy, stable, and supported residents.
State and federal health and housing policymakers recently identified some points of commonality that could be instructive for an incoming administration. Below are three practical tips for state policymakers interested in improving health through housing. For more detail on these and other strategies, please see “Federal and State Collaboration to Improve Health through Housing.”
1. Codify Health and Housing Priorities in Qualified Allocation Plans (QAPs). State policymakers can use existing policy levers to engage housing providers in efforts to address health through housing. For example, State Housing Finance Agencies can develop and enforce QAPs that reflect the state’s health and housing priorities. A number of states are encouraging housing developers to address health needs by awarding QAP points to developers applying for U.S. Treasury Low Income Housing Tax Credits (LIHTC) who articulate a plan to address the health needs of residents.
- Louisiana’s QAP has for years awarded points to developers who set aside five-15 percent of units for the state’s Medicaid-supported Permanent Supportive Housing program. The state started off with a five percent requirement, but the program now has sufficient developer buy-in that incentive points are used.
- Oregon’s QAP awards points for aligning projects with a Coordinated Care Organization’s (CCO’s) community health improvement plan, when that plan prioritizes housing. A majority of the CCOs now prioritize housing.
States can also encourage property owners to house vulnerable populations by supporting landlord risk mitigation funds to which housing providers could apply for reimbursement for damage to their properties. According to the U.S. Interagency Council on Homelessness (USICH), communities with such funds have found them to be helpful in engaging property owners and managers in efforts to combat homelessness.
2. Consider braided funding. In light of the scarcity of affordable housing and proposals to change the funding structure of Medicaid, state health and housing policymakers might consider braiding other sources of funding to augment federal funding for health and housing. For example, states could support landlord risk mitigation funds with braided funding from the Community Development Block Grant or other public or private sources. Some other possible funding sources for states include:
- Hospital investments. The investments made by nonprofit hospitals in community benefit and community building activities in order to maintain their tax-exempt status could be an important source of funding for health and housing initiatives. State policymakers could require these investments even if the federal requirements change in a new administration. States could encourage hospitals and other entities that participate in risk-bearing accountable care structures to invest in housing as a means to control costs and improve outcomes for high-risk beneficiaries, and encourage or require them to include housing in community health needs assessments.
- U.S. Department of Agriculture (USDA) funds. Some states are layering rural development funds from the U.S. Department of Agriculture (USDA) into their affordable housing strategy. The USDA Rural Housing Service oversees programs that provide rural rental assistance, and support rural home ownership and home repair.
- Private funds. States could continue to leverage private and philanthropic investments through social impact bonds and Pay for Success programs, as does the Massachusetts Pay for Success initiative aimed at reducing chronic homelessness.
3. Leverage the Medicaid Managed Care Contracting Process. Many states that deliver Medicaid services through managed care organizations (MCOs) already encourage or require MCOs to address housing and other social determinants of health in their bid proposals.
States can also work to reduce barriers to MCO’s participation in health and housing initiatives by ensuring that MCO rates allow for investment in housing and upstream prevention. Oregon uses the term “premium slide” to describe what happens when MCOs invest in population health or upstream prevention interventions that successfully reduce utilization, and then face a cut in their premium rates for future years as a result of the lower spending.
- Oregon’s recently approved Section 1115 demonstration program renewal aims to address premium slide by building a higher profit margin into the capitation rates of high-performing CCOs that show cost reduction and quality improvement. The renewal also includes flexible services in the numerator of the medical loss ratio alongside claims costs, instead of in the denominator with administrative costs, which plans are encouraged to minimize.
States have invested significantly in improving health through housing, often buoyed by the expansion of Medicaid pursuant to the Affordable Care Act. What will become of those investments if federal funding for Medicaid is substantially reduced or changed remains an open question.
Policymakers interested in garnering support for existing and new health and housing initiatives can work to make the business case for stably housing vulnerable populations, including the elderly and those transitioning out of institutions. Whatever the future holds, cross-sector cooperation between state and federal health and housing policymakers will be essential to improving the health of the most vulnerable.
Support for this blog post was provided in part by the Robert Wood Johnson Foundation, and by The Commonwealth Fund. The views expressed here do not necessarily reflect those of the Foundation or The Commonwealth Fund.