by Tony S. Foresta
Nevada continues to struggle to reduce homelessness across the state. The rate of homelessness in Nevada remains well above the national average at 26 individuals per 10,000, and as illustrated in Figure 1, California is the only state in the Intermountain West with a higher homelessness rate. Furthermore, the Las Vegas/Clark County metropolitan area is home to one of the largest homeless populations in the country, ranking 8th in the nation in the major city category.
Figure 1: Homelessness Rate
Addressing homelessness requires a set of comprehensive, pragmatic solutions that provides immediate assistance while addressing the root causes of chronic homelessness. Part of that solution could involve leveraging the Medicaid 1915(i) State Plan Amendment (SPA), as was recently proposed during the May 15, 2018 meeting of the Nevada Legislative Committee to Study Issues Regarding Affordable Housing. Amending Nevada’s current SPA could allow the state to provide additional home and community-based services (HCBS), including supportive housing services, to populations most vulnerable to chronic homelessness, such as those with mental health and substance use disorders. Supportive housing and HCBS interventions represent an attractive policy due to the comprehensive care offered, evidence-based methodology, and significant cost savings. Here, we briefly discuss how 1915(i) works, explain why the policy could be beneficial, and consider potential implementation challenges.
Medicaid 1915(i): Explained
In 2005, the United States Congress passed the Deficit Reduction Act, which added Section 1915(i) to the existing Social Security Act. The amendment granted states the option to provide supportive housing services and HCBS to individuals living at or below 150 percent of the federal poverty level. The HCBS offered through 1915(i) “…provide opportunities for Medicaid beneficiaries to receive services in their own home or community rather than institutions or other isolated settings.” The Affordable Care Act (ACA) later expanded 1915(i) to include coverage for “…mental health and substance use disorders and other services requested by a state and approved by the Secretary of Health and Human Services” as well as flexibility to states in offering HCBS and supportive housing to specific, targeted populations.
Nevada currently utilizes 1915(i), but under existing provisions, Medicaid only covers adult day care health and habilitation. To be eligible, individuals must have had a traumatic brain injury within 90 days, meet two needs-based criteria, be medically stable not requiring acute medical interventions, and possess functional ability to indicate potential for improvement. Care recipients who are eligible can receive supportive housing assistance and an array of wraparound services that reduce the need for institutionalization and help patients achieve long-term independence. Table 1 lists the services currently provided under Nevada’s existing 1915(i) SPA.
Table 1: Current 1915(i) SPA Services Available in Nevada
To amend the current 1915(i) the Nevada Department of Health and Human Services (DHHS) must submit a SPA amendment request to the U.S. Department of Health and Human Services Centers for Medicare and Medicaid Services (CMS) for review and approval. DHHS must clearly identify their targeted population and provide an objective assessment that evaluates patient eligibility. Stephanie Woodard, COD Program Director for the Nevada Division of Public and Behavioral Health, testified before the Nevada Legislature that approximately 75 percent of the homeless population have either a serious disability or mental health condition. Hence, targeting services to this specific high-cost, high-needs population would be effective.
Homelessness Is Expensive
Why should Nevada consider pursuing this policy? First, homelessness is expensive for taxpayers. As reported by the United States Interagency Council on Homelessness in 2017, one chronically homeless individual can cost taxpayers an estimated $30,000 to $50,000 per year due to emergency room and in-patient visits, police and incarceration expenses, and other associated community services. If Nevada introduces an intervention program that is capable of reducing homelessness (and the associated costs), and the benefits of the program outweigh its operating costs, then such a program would benefit the entire community.
Studies show that providing HCBS to homeless individuals with substance use disorders can be highly cost-effective. In 2005, Washington introduced Eastlake 1811, a program that provided permanent supportive housing and treatment services to homeless individuals who had experienced alcohol dependency. Research found that, in the absence of the program, the median cost for a homeless individual was $4,066 per month, whereas with the supportive housing intervention, the median cost fell to only $1,492 per month. Over the course of a year, Eastlake 1811 reduced total costs associated with homelessness by nearly 53 percent.
Programs that provide HCBS and supportive housing also improve quality of life for homeless individuals. In 2003, the Colorado Coalition for the Homeless created the Denver Housing First Collaborative, a program that combines supportive housing with mental health, physical health, and substance abuse treatments as well as other wrap-around services. One study shows that the program reduced emergency room visits by about 34 percent, detox visits by 82 percent, incarceration days and costs by 76 percent, and impatient visits by 40 percent. Thus, not only is the intervention method cost-effective, but it remains incredibly efficient in improving conditions and outcomes for the homeless population as well.
A significant advantage of using Medicaid 1915(i) is that federal funding can be leveraged, thereby reducing the cost burden on state and local government budgets. Still, however, the state and local governments must match some of that funding. Julie Kotchevar, PhD, administrator of the State of Nevada Division of Public and Behavioral Health (DPBH), explained during her testimony to the Nevada Legislature on March 31, 2018 that local governments (counties, cities, etc.) must match between 5 to 35 percent of service costs and 50 percent of administration costs. Local government participation is therefore crucial and necessary if Nevada wishes to implement this solution.
Finally, if the 1915(i) SPA is implemented by the state, guidelines should be adopted that ensure that the value from cost savings is rerouted and funded back into local supportive housing projects (as recommended by Julie Kotchevar). If Medicaid dollars fund HCBS that would have otherwise been financed by local governments, for example, then those local dollars should continue to fund supportive housing and other affordable housing and homelessness projects. However, to accomplish this objective, the Nevada Legislature would have to set clear guidelines that describe how and where the value from the cost-savings is allocated. Nevada lawmakers may want to consider the full scope of this solution as it drafts legislation for the 2019 80th legislative session.