Low-income people who need help paying rent or securing temporary housing will get additional government aid under a new initiative to tackle the country’s record homelessness, the Biden administration said Friday.
The initiative seeks to address homelessness by expanding what is covered under Medicaid in certain states. Eight states and the District of Columbia have been selected to participate in a federal “accelerator” to reduce homelessness, according to the U.S. Department of Health and Human Services (HHS) and Department of Housing and Urban Development (HUD).
The accelerator program will provide assistance to the states, as well as Washington, D.C., which will allow them to use Medicaid dollars to help people find housing and avoid eviction. Medicaid has traditionally provided government-funded health insurance to low-income households.
“We’re looking to use federal healthcare dollars for wellness care. We get to people before they get ill and we keep them healthy,” Xavier Becerra, secretary of the U.S. Department of Health and Human Services, told reporters.
“We’re simply saying to the states, if you can prove to us that with this Medicaid dollar, you will improve someone’s health, then you’ve essentially served the purpose of the Medicaid program and you’re saving taxpayers more money,” he added.
Some states already allocate Medicaid funds towards housing support for the homeless, such as California. But with more people experiencing homelessness, the federal government has ramped up efforts to help eight states — Arizona, California, Hawaii, Maryland, Massachusetts, Minnesota, North Carolina and Washington — and D.C. to better implement the program.
The new initiative comes as homelessness in the U.S. has hit a new high. Between 2022 and 2023, the number of people experiencing homelessness grew by 12%, which is roughly 71,000 more people, to 653,000, according to a December report by HUD. That’s the highest on record.
A sharp rise in rents over the past few years has also left millions of tenants spending too much of their incomes on housing costs, pushing the share of so-called rent-burdened households to an all-time high, according to a Harvard report.
A full-time minimum wage worker cannot afford a modest one-bedroom rental in over 92% of counties in the U.S., a separate report from the National Low Income Housing Coalition showed.
The largest share of people experiencing homelessness were between the ages of 35 and 44. The top three states with the largest absolute increases in homelessness between 2022 and 2023 were New York, California and Florida.
“Nobody in America should experience homelessness,” Becerra stated.
The federal government sets rules for all states when it comes to running the Medicaid program, and provides at least half of the funding. The program supports over 90 million low-income people in the U.S., according to KFF, a nonprofit organization focused on public health and policy.
The federal government recently issued new guidance on how states can use millions, or even billions of dollars in Medicaid, to support people’s housing expenses more broadly, including rent and temporary housing. The federal “accelerator” to reduce homelessness will provide assistance to states to implement it.
Some states, such as California, already have initiatives in place that provide services to homeless people to pay for security deposits, or assign them case managers to look for apartments. Arizona is allocating Medicaid funds to help homeless people cover six months of rent.
— Alessandra Malito contributed to this report.