A bill that would classify homelessness as a health problem and require insurers to provide coverage for the treatment of homelessness is currently under consideration in the Hawaii state legislature. The sponsor of the legislation wants to cure homelessness with housing by redirecting some of the state’s $2 billion annual Medicaid budget to pay for it.

According to news reports, Hawaii had the highest rate of homelessness of all U.S. states in 2015, with 53 homeless people for every 10,000 residents, according to the National Alliance to End Homelessness.

The Hawaii legislation, SB 2, specifies that “each individual or group accident and health or sickness insurance policy issued or renewed in this state after Jan. 1, 2018, shall provide to the policyholder coverage for the treatment of homelessness.”

The bill may be the first of its type introduced nationally. “I’ve not heard of any legislature of this kind,” Senator Josh Green, M.D., sponsor of the bill, told MHW. People are often struggling with a mental illness or drug addiction or regular health challenge because they’re homeless, said Green. “Sometimes homelessness accompanies these issues and sometimes it’s made worse by it,” said Green, an emergency room doctor. “I’ve been able to take care of a lot of people that are homeless.”

Cost projections

People who are homeless in Hawaii tend to need very high-end care, Green said. They go to the emergency room, where they utilize anywhere from $75,000 to $150,000 of health care services, Green noted. “They can’t make good decisions for themselves to get basic care,” said Green. “Sometimes they have no identification and no way to get to the clinic.” Many go to The Queen’s Medical Center, considered the best in Hawaii, he said. It has no clinic, said Green, but it offers full acute care.

Green added, “Over a billion dollars of Medicaid dollars get spent delivering important care.” Homeless patients may need to see a psychologist and receive basic medication, and they need a roof over their heads, he said. “My reason for using taxpayer dollars is that they are already contributing to Medicaid; why not use it better [toward helping the homeless]?” he said.

Medicaid funding could be put toward a better use of resources and pay for care coordination, said Green. “As a legislator, I operate under the assumption [that it’s going to be] an uphill battle finding new funding from colleagues,” he said.

The state had a $2 billion Medicaid budget, Green said. “We should spend 20 percent of it on housing,” he said. Green pointed to a recent state survey that found that health care costs for chronically homeless people dropped 43 percent when they had decent housing.

About $3 trillion a year is spent on health care globally, he said. About 8,000 to 12,000 people are homeless in Hawaii; 1,300 are chronically homeless, Green added. “If we focus on the 1,300 that are chronically homeless, we could save $100 million,” he noted. “We could invest $400 million and see $500 million in return. This could be a game changer.”

A person who is chronically homeless may become a victim of violence or a sexual assault or end up in prison for 75 thousand a year, said Green. “These are all the reasons I developed this concept. It will take some time for people to understand,” he said.

Sheltering the chronic homeless

“We’re expecting the Trump administration to move Medicaid to a block grant,” said Green. “It’s Republican ideology to use the argument to say it’s the state’s right. If they say that, and we go toward a block grant, I think it’s a bad idea,” he said. “I’m encouraging our state to shelter the chronically homeless and invest in better programs.”

Hawaii expanded its Medicaid program three years ago, prompting an increase from 285,000 people to 362,000, Green noted.

Green said he will work closely with his colleagues on this bill. The first public hearing was held last week. Another hearing with amendments is scheduled for Feb. 6. “I’ll impress upon them the need for new solutions,” he said. “We’re looking at helping people in a desperate state. It’s the most novel [approach] we’ve got.” Green admits the legislation could take a few years to pass.

The director of the National Coalition for the Homeless says the housing market is extremely unaffordable across the country. “We’ve been saying for a very long time that housing itself is a [public] health problem,” said Megan Hustings. “We have not heard of a similar bill.”

Hustings added, “We really can’t afford to get rid of the ACA [Affordable Care Act],” she said, particularly for people who are living on the street. “Medicaid is extremely helpful in providing wraparound services that could keep someone in housing.”

She added, “Oftentimes mental illness appears after someone becomes homeless, after they lose their home and are experiencing the trauma of homelessness. Some think it’s the reverse; that’s a commonly held stereotype.”

Federal challenges

The executive director of the Technical Assistance Collaborative, a national organization that provides technical expertise to organizations and policymakers in the areas of mental health, substance abuse, human resources and affordable housing, said that Medicaid is statutorily prohibited from paying for room and board. “Even if classified as a medical condition, federal statute prohibits the use of Medicaid funds for housing,” Kevin Martone told MHW.

Martone noted that a couple of states (New York and Illinois) tried to get permission from the Centers for Medicare & Medicaid Services to pay for housing but were denied. “As a result, they are using state savings to pay for housing,” he said.

“Housing is a social determinant of health,” added Martone. “But, by suggesting Medicaid pay for housing, we are sending a message to our policymakers that we don’t need new resources at HUD [U.S. Department of Housing and Urban Development] dedicated to housing assistance.”

Martone pointed to the ongoing “attack” at the federal level and the federal government’s attempt to significantly reduce spending. Many could lose coverage under the ACA, he said. “There are waiting lists in states for services, and we have workforce shortages due to low reimbursement rates,” Martone said. “Medicaid savings should support services first.”

“The homelessness and disability community are desperate for housing solutions because federal and state government have not sufficiently addressed the affordable housing crisis,” said Martone.

Martone added, “Congress made significant progress in the past few years eliminating veterans’ homelessness because they paid attention to it and allocated resources. The homeless, health care and disability communities need to partner with the affordable housing [community] to urge policymakers to prioritize affordable housing resources as they did for veterans.”