How Biden Administration Is Utilizing Medicaid to Address Record-High Homelessness in US

The largest demographic affected by homelessness falls within the 35 to 44 age group.

PUBLISHED FEB 12, 2024

Cover Image Source: A homeless man sleeps under an American Flag blanket on a park bench | Getty Images | Photo by Spencer Platt

In a significant move to address the escalating homelessness crisis in the United States, the Biden administration has unveiled an innovative initiative aimed at providing additional government aid to low-income individuals struggling to pay rent or secure temporary housing. This groundbreaking effort leverages Medicaid funds to expand support for housing-related issues in select states, signaling a comprehensive approach to tackle the record-high levels of homelessness, per Market Watch.

U.S. President Joe Biden and Education Secretary Miguel Cardona | Getty Images | Photo by Chip Somodevilla

The Biden administration's announcement comes in response to the alarming surge in homelessness, reaching a record high in 2023. The U.S. Department of Health and Human Services (HHS) and the Department of Housing and Urban Development (HUD) jointly revealed plans for an ambitious "accelerator" program, targeting eight states and the District of Columbia. These states have been strategically chosen to participate in the federal initiative, emphasizing a collaborative effort to reduce homelessness through Medicaid expansion.

Secretary of the U.S. Department of Health and Human Services, Xavier Becerra expressed the administration's commitment, stating, "Nobody in America should experience homelessness." The initiative focuses on enhancing Medicaid coverage in specific states to assist individuals in finding housing and avoiding eviction, addressing the root causes of homelessness.

The "accelerator" program aims to empower states and Washington, D.C., by allowing them to allocate Medicaid dollars toward housing support for those in need. Traditionally known for offering government-funded health insurance to low-income households, Medicaid is now being extended to cover a broader spectrum of wellness care, aligning with the administration's proactive approach to preventing homelessness before it occurs.

Secretary Becerra highlighted the transformative potential of using federal healthcare dollars for wellness care, emphasizing the goal of intervening before individuals face health challenges and maintaining their overall well-being. The administration encourages states to demonstrate that utilizing Medicaid funds for housing support will improve someone's health, serving the dual purpose of fulfilling the Medicaid program's objectives and saving taxpayers money in the long run.

A man tows his cart down the street on Skid Row | Getty Images | Photo by David McNew

While some states, such as California, already allocate Medicaid funds towards housing support, the federal government's accelerated efforts aim to assist states like Arizona, California, Hawaii, Maryland, Massachusetts, Minnesota, North Carolina, and Washington, along with the District of Columbia, in better implementing and expanding these programs. The goal is to create a more comprehensive and effective framework to address the growing homelessness crisis.

The urgency of this initiative is underscored by the alarming statistics presented in a December 2023 report by HUD, revealing a 12% increase in homelessness between 2022 and 2023, totaling approximately 71,000 additional individuals experiencing homelessness, reaching a record high of 653,000. The report highlights the critical need for innovative solutions to reverse this troubling trend.

Rising rents over the past few years have contributed significantly to the homelessness crisis, pushing millions of tenants into the realm of "rent-burdened" households, where a substantial portion of their incomes is allocated to housing costs. A report by Harvard further emphasizes the challenges, indicating that a full-time minimum wage worker cannot afford a modest one-bedroom rental in over 92% of U.S. counties. The confluence of these factors necessitates a holistic and targeted approach to combat homelessness at its roots.

A 'for rent' sign is displayed outside an apartment building | Getty Images | Photo by Allison Dinner

The largest demographic affected by homelessness falls within the 35 to 44 age group, and the top three states with the most significant absolute increases in homelessness between 2022 and 2023 were New York, California, and Florida. Secretary Becerra's unequivocal statement, "Nobody in America should experience homelessness," resonates as a rallying cry for concerted efforts to address this complex issue comprehensively.

Medicaid, a federal program that sets rules for all states and provides at least half of the funding, supports over 90 million low-income individuals in the U.S. According to KFF, a nonprofit organization focused on public health and policy, the federal government has recently issued new guidance on utilizing Medicaid funds to support housing expenses more broadly, including rent and temporary housing. The "accelerator" program aims to assist states in implementing this guidance effectively.

States like California have already taken proactive steps by implementing initiatives that provide services to homeless individuals, covering expenses such as security deposits or assigning case managers to aid in apartment searches. Arizona is allocating Medicaid funds specifically to help homeless individuals cover six months of rent, illustrating the potential impact of innovative approaches tailored to each state's unique needs.