(Headline USA) Traditionally, Medicaid, the joint state and federal health insurance program for people with disabilities or low incomes, would only pay for medical expenses. However, last year the Biden administration gave Arizona and Oregon permission to use Medicaid money for housing.
Now California wants to join those states.
Gov. Gavin Newsom has proposed spending more than $100 million per year in the state’s Medicaid program to pay for up to six months of housing for people who are or risk becoming homeless; are coming out of prison or foster care; or are at risk for hospitalization or emergency room visits.
It would be the biggest test yet of using Medicaid money for housing.
California has the nation’s largest Medicaid program, with more than 13 million patients — or about a third of the state’s population. California also has nearly a third of the nation’s homeless population, according to federal data.
It would also be very expensive.
California is expected to have a $22.5 billion budget deficit this year, and it could get bigger in years to come. Meanwhile the state’s Medicaid spending is projected to increase by $2.5 billion over the next three years, according to the nonpartisan Legislative Analyst’s Office.
“What we’re really doing is expanding the welfare state, which is going to become just a huge financial problem,” said Wayne Winegarden, senior fellow at the Pacific Research Institute, a group that advocates for free-market policies.
California experimented with using Medicaid money for some housing-related expenses in 2016 when it launched a pilot project in 26 counties. While Medicaid did not pay for rent, it paid for things like security deposits and furniture.
Now California wants to go further by using Medicaid money to directly pay some people’s rent.
Democratic Assemblymember Joaquin Arambula, who chairs the budget subcommittee that will vet Newsom’s proposal, said lawmakers are supportive.
Adapted from reporting by the Associated Press